10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 1

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

Commission file number: 000-52170

INNERWORKINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-5997364
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

600 West Chicago Avenue, Suite 850, Chicago, IL 60654	(312) 642-3700
(Address of principal executive offices) (Zip Code)	(Registrants’ telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $0.0001 par value	Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   ¨    No   ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes   ¨    No   ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes   ý    No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).        Yes   ý     No   ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨	Accelerated filer  ý	Non-accelerated filer  ¨	Smaller reporting company  ¨
		(Do not check if a smaller reporting company)	Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes: ¨ No:  ý

The aggregate market value of the common equity held by non-affiliates of the registrant as of June 30th, 2017 the last business day of the registrant’s most recent completed second quarter, was $524,995,340 (based on the closing sale price of the registrant’s common stock on that date as reported on the Nasdaq Global Market).

As of July 24, 2018, the registrant had 52,171,438 shares of common stock, par value $0.0001 per share, outstanding which includes 487,392 shares of unvested restricted stock awards that have voting rights and are held by members of the Board of Directors and the Company’s employees.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant filed with the Securities and Exchange Commission (“SEC”) a proxy statement pursuant to Regulation 14A on April 18, 2018. An amended and restated Proxy Statement (the “A&R Proxy Statement”) will be filed with the SEC as soon as practicable.  Portions such A&R Proxy statement are incorporated by reference into Part III of this Annual Report on Form 10-K/A.

TABLE OF CONTENTS

	Explanatory Note	4
PART I		5
Item 1.	Business	5
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	18
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	18
PART II		18
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	38
Item 8.	Financial Statements and Supplementary Data	39
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	95
Item 9A.	Controls and Procedures	95
Item 9B.	Other Information	99
PART III		100
Item 10.	Directors, Executive Officers and Corporate Governance	100
Item 11.	Executive Compensation	100
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	100
Item 13.	Certain Relationships and Related Transactions and Director Independence	100
Item 14.	Principal Accountant Fees and Services	100
PART IV		102
Item 15.	Exhibits, Financial Statement Schedule	102
Signatures		105

3

EXPLANATORY NOTE

On May 7, 2018, InnerWorkings, Inc. (the “Company”) filed a Current Report on Form 8-K disclosing its intention to restate certain historical financial statements based on errors identified during the course of its first quarter 2018 financial reporting close process. Accordingly, in this amendment to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “Form 10-K/A”), the Company is restating its historical financial statements previously filed with the Securities and Exchange Commission (the “SEC”) for the years ended December 31, 2017 and 2016 and all interim periods therein (the “Restated Periods”).

The financial statements contained in this Form 10-K/A correct our accounting for recording portions of revenue and costs of goods sold in the incorrect periods, which resulted in a material impact on net income and earnings per share, but have no material impact on our cash flow or liquidity for the Restated Periods. With respect to the year ended December 31, 2015 (the “Revised Period”), the corrections to the financial statements related to the recording of cost of goods sold were deemed immaterial: however, the Company has voluntarily made the adjustments to such year. The Restated and Revised Periods also include adjustments for certain immaterial accounting errors related to all periods covered in this Form 10-K/A, which are not material individually or in the aggregate.

The corrections to the Restated and Revised Periods, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.

Description of the Restatement

In completing our internal review procedures during the first quarter of 2018, the Company identified certain errors in the Restated Periods, primarily related to the timing of the recognition of (i) revenue recognized for goods shipped and services performed and (ii) cost of goods sold for certain orders that were not recorded in the period in which the end product was sold to the customer and revenue was recognized. Accordingly, we have restated the financial statements for the years ended December 31, 2017 and 2016 (and related interim periods) to correct for the identified misstatements.

In addition to the correction of the errors discussed above, the Company has voluntarily made other immaterial corrections in all periods presented. Such corrections are reflected in the Restated and Revised Periods and, together with the other immaterial corrections described above, are referred to herein as “Adjustments.” These Adjustments resulted in a decrease in net income of $2.3 million in the aggregate for the Restated and Revised Periods.

For additional information regarding the corrections to the financial statements in the Restated and Revised Periods, see Notes 20 and 21 of the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”

Items Amended by this Form 10-K/A

This Form 10-K/A amends and restates the entire contents of the original Form 10-K. The portions of this Form 10-K/A that have been revised to give effect to the Restatement and matters related thereto are as follows:

• Item 1A. Risk Factors

• Item 6. Selected Financial Data

• Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

• Item 8. Financial Statements and Supplementary Data

• Item 9A. Controls and Procedures

• Item 9B. Other Information

• Item 10. Directors, Executive Officers and Corporate Governance

• Item 11. Executive Compensation

• Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

• Item 13. Certain Relationships and Related Transactions and Director Independence

• Item 14. Principal Accountant Fees and Services

• Item 15. Exhibits, Financial Statement Schedules

Except as described above, this Form 10-K/A does not amend, update or change any other items or disclosures in the original Form 10-K filed on March 16, 2018 and does not purport to reflect any information or events subsequent to the filing thereof. Accordingly, this Form 10-K/A should be read in conjunction with the Company’s other SEC filings.

4

The Company’s Quarterly Reports on Form 10-Q to be filed during 2018 will include the restated 2017 comparable prior quarter and year to date periods. We have not filed, and do not intend to file, amendments to (i) our Quarterly Reports on Forms 10-Q for the first three quarterly periods in the years ended December 31, 2017, 2016 and 2015 or (ii) our Annual Reports on Forms 10-K for the years ended December 31, 2016 and 2015. Accordingly, investors should rely only on the financial information and other disclosures regarding the Restated and Revised Periods in this Form 10-K/A or in future filings with the SEC (as applicable), and not on any previously issued or filed reports, earnings releases or similar communications relating to these periods.

PART I

Unless otherwise indicated or the context otherwise requires, references in this Annual Report on Form 10-K to “InnerWorkings, Inc.,” “InnerWorkings,” the "Company” “we,” “us” or “our” are to InnerWorkings, Inc., a Delaware corporation and its subsidiaries.

Forward-Looking Statements 

Certain statements in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements involve a number of risks, uncertainties and other factors that could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors which could materially affect such forward-looking statements can be found in Part I, Item 1A entitled “Risk Factors” and Part II, Item 7 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K. Investors are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date hereof. Except as expressly required by federal securities laws, we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or changed circumstances.

Item 1. Business

Our Company

We are a leading global marketing execution firm for some of the world's most marketing intensive companies, including those listed in the Fortune 1000. As a comprehensive outsourced global solution, we leverage proprietary technology, an extensive supplier network and deep domain expertise to streamline the creation, production and distribution of marketing and promotional materials, signage and displays, retail experiences, events and promotions and product packaging across every major market worldwide. The items we source generally are procured through the marketing supply chain and we refer to these items collectively as marketing materials. Through our network of more than 8,000 global suppliers, we offer a full range of fulfillment and logistics services that allow us to procure marketing materials of virtually any kind. The breadth of our product offerings and services and the depth of our supplier network enable us to fulfill the marketing materials procurement needs of our clients.

Our proprietary software applications and databases create a fully-integrated solution that stores, analyzes and tracks the production capabilities of our supplier network, as well as detailed pricing data. As a result, we believe we have one of the largest independent repositories of supplier capabilities and pricing data for suppliers of marketing materials around the world. We leverage our supplier capabilities and pricing data to match our orders with suppliers that are optimally suited to meet the client’s needs at a highly competitive price. Our technology and databases of product and supplier information are designed to capitalize on excess manufacturing capacity and other inefficiencies in the traditional marketing materials supply chain to obtain favorable pricing while delivering high-quality products and services for our clients.

By leveraging our technology and data, our clients are able to reduce overhead costs, redeploy internal resources and obtain favorable pricing and service terms. In addition, our ability to track individual transactions and provide customized reports detailing procurement activity on an enterprise-wide basis provides our clients with greater visibility and control of their marketing materials expenditures.

We generate revenue by procuring and purchasing marketing materials from our suppliers and selling those products to our clients. We procure products for clients across a wide range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable and transportation.

5

We were formed in 2001, commenced operations in 2002 and converted from a limited liability company to a Delaware corporation in January 2006. Our corporate headquarters are located in Chicago, Illinois. For the year ended December 31, 2017, our annual revenues were $1.1 billion and we operated in 68 global office locations.

We organize our operations into two segments based on geographic regions: North America and International. The North America segment includes operations in the United States and Canada; the International segment includes operations in Mexico, South America, Central America, Europe, the Middle East, Africa and Asia. We believe the opportunity exists to expand our business into new geographic markets. Our objective is to continue to increase our sales in the major markets in the United States and internationally. We intend to hire or acquire more account executives within close proximity to these large markets.

Industry Overview

Our business of providing marketing execution solutions primarily includes the procurement of marketing materials, branded merchandise, product packaging and retail displays. Based on external sources we estimate the global market for marketing materials, product packaging and retail displays, in aggregate, to be approximately $600 billion annually.

Procurement of marketing materials is often dispersed across several areas of a business, including sales, marketing, communications and finance. The traditional process of procuring, designing and producing an order often requires extensive collaboration by manufacturers, designers, agencies, brokers, fulfillment and other middlemen, which is highly inefficient for the customer, who typically pays a mark-up at each intermediate stage of the supply chain. Consolidating marketing activities across the organization represents an opportunity to reduce total expenditure and decrease the number of vendors in the marketing supply chain.

To become more competitive, many large corporations seek to focus on their core competencies and outsource non-core business functions, which typically include marketing execution. According to a recent industry report the global business process outsourcing market for managed procurement is more than $250 billion and growing at about 12% annually.

We seek to capitalize on the trends impacting the marketing supply chain and the movement towards outsourcing of non-core business functions by leveraging our propriety technology, deep domain expertise, extensive supplier network and purchasing power.

Our Solution 

Utilizing our proprietary technology and data, we provide our clients a global solution to procure and deliver marketing materials at favorable prices. Our network of more than 8,000 global suppliers offers a wide variety of products and a full range of print, fulfillment and logistics services.

Our procurement software and database seeks to capitalize on excess manufacturing capacity and other inefficiencies in the traditional supply chain for marketing materials. We believe that the most competitive prices we obtain from our suppliers are offered by the suppliers with the most unused capacity. We utilize our technology to:

• greatly increase the number of suppliers that our clients can access efficiently;

• obtain favorable pricing and deliver high quality products and services for our clients; and

• aggregate our purchasing power.

Our proprietary technology and data streamline the procurement process for our clients by eliminating inefficiencies within the traditional marketing supply chain and expediting production. However, our technology cannot manage all of the variables associated with procuring marketing materials, which often involves extensive collaboration among numerous parties. Effective management of the procurement process requires that dedicated and experienced personnel work closely with both clients and suppliers. Our account executives and production managers perform that critical function.

Account executives act as the primary sales staff to our clients. Production managers manage the entire procurement process for our clients to ensure timely and accurate delivery of the finished product. For each order we receive, a production manager uses our technology to gather specifications, solicit bids from the optimal suppliers, establish pricing with the client, manage production and purchase and coordinate the delivery of the finished product.

Each client is assigned an account executive and one or more production managers, who develop relationships with client personnel responsible for authorizing and making purchases. Our largest clients often are assigned multiple production managers. In certain cases, our production managers function on-site at the client's offices. Whether on-site or off-site, a production manager

6

functions as a virtual employee of the client. As of December 31, 2017, we had approximately 650 production managers and account executives, including over 275 working on-site at our client's offices.

Our Proprietary Technology

Our proprietary technology is a fully-integrated solution that stores equipment profiles for our supplier network and price data for orders we quote and execute. Our technology allows us to match orders with the suppliers in our network that are optimally suited to produce an order at a highly competitive price. Our technology also allows us to efficiently manage the critical aspects of the procurement process, including gathering order specifications, identifying suppliers, establishing pricing, managing production and coordinating purchase and delivery of the finished product. 

Our database stores the production capabilities of our supplier network, as well as price and quote data for bids we receive and transactions we execute. As a result, we maintain one of the largest independent repositories of equipment profiles and price data for suppliers of marketing materials. Our production managers use this data to discover excess manufacturing capacity, select optimal suppliers, negotiate favorable pricing and efficiently procure high-quality products and services for our clients. We rate our suppliers based on product quality, customer service and overall satisfaction. This data is stored in our database and used by our production managers during the supplier selection process.

We believe our proprietary technology allows us to procure marketing materials more efficiently than traditional manual or semi-automated systems used by many manufacturers in the marketplace. Our technology includes the following features:

• Customized order management. Our solution automatically generates customized data entry screens based on product type and guides the production manager to enter the required job specifications. For example, if a production manager selects “envelope” in the product field, the screen will automatically prompt the production manager to specify the size, paper type, window size and placement and display style.

• Cost management. Our solution reconciles supplier invoices to executed orders to ensure the supplier adhered to the pricing and other terms contained in the order. In addition, it includes checks and balances that allow us to monitor important financial indicators relating to an order, such as projected gross margin and significant job alterations.

• Standardized reporting. Our solution generates transaction reports that contain quote, supplier capability, price and customer service information regarding the orders the client has completed with us. These reports can be customized, sorted and searched based on a specified time period or the type of product, price or supplier. In addition, the reports give our clients insight into their spend for each individual job and on an enterprise-wide basis, which allows the client to track the amounts it spends on job components such as paper, production and logistics.

• Task-tracking.  Our solution creates a work order checklist that sends e-mail reminders to our production managers regarding the time elapsed between certain milestones and the completion of specified deliverables. These automated notifications enable our production managers to focus on more critical aspects of the process and eliminate delays.

• Historical price baseline.  Some of our larger clients provide us with pricing data for orders they completed before they began to use our solution. For these clients, our solution automatically compares our current price for a job to the price obtained by the client for a comparable historical job, which enables us to demonstrate on an ongoing basis the cost savings we provide.

We have created customized e-commerce stores on our client and third party platforms to order pre-selected products, such as personalized stationery, marketing brochures and promotional products. Automated order processes can send requests to our vendors for fulfillment or printing of variable print on demand products.

Our Clients

We procure marketing materials for corporate clients across a wide range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, food and beverage, broadcasting and cable and transportation. Our clients also include manufacturers that outsource jobs to us because they do not have the requisite capabilities or capacity to complete an order. For the years ended December 31, 2017, 2016 and 2015, our largest customer accounted for 5%, 5% and 5% of our revenue, respectively. Revenue from our top ten clients accounted for 28%, 28% and 27% of our revenue in 2017, 2016 and 2015, respectively.

We generate revenue by procuring and purchasing marketing materials from our suppliers and selling those products to our clients. Our services are provided under long-term contracts, purchase orders, or other contractual arrangements, and the scope and terms of these contracts vary by client.

Our Products and Services

7

We offer a full range of solutions to support the marketing execution needs of our clients. Our outsourced print management solution encompasses the design, sourcing and delivery of printed marketing materials such as direct mail, in-store signage and marketing collateral. We provide a similar outsourced solution for the design, sourcing and delivery of other categories in the marketing supply chain, such as branded merchandise and product packaging. We also assist clients with the management of events and promotions spending and related procurement needs. Our retail environments solution involves the design, sourcing and installation of point of sale displays, permanent retail fixtures and overall store design. We also offer on-site outsourced creative studio services, digital marketing services, as well as on-demand creative services.

We offer comprehensive fulfillment and logistics services, such as kitting and assembly, inventory management and pre-sorting postage. These services are often essential to the completion of the finished product. For example, we assemble multi-level direct mailings, insurance benefits packages and coupons and promotional incentives that are included with credit card and bank statements. We also provide creative services, including copywriting, graphics and website design, identity work and marketing collateral development and pre-media services, such as image and print-ready page processing and proofing capabilities. Our e-commerce and online collaboration technology empowers our clients with branded self-service ecommerce websites that prompt quick and easy online ordering, fulfillment, tracking and reporting.

We agree to provide our clients with products that conform to the industry standard of a “commercially reasonable quality” and our suppliers in turn agree to provide us with products of the same quality. The contracts we execute with our clients typically include customary provisions that limit the amount of our liability for product defects. To date, we have not experienced significant claims or liabilities relating to defective products.

Our Supplier Network

Our global network of more than 8,000 suppliers includes graphic designers, paper mills and merchants, digital imaging companies, specialty binders, finishing and engraving firms, fulfillment and distribution centers and manufacturers of displays and promotional items.

These suppliers have been selected from among thousands of potential suppliers worldwide on the basis of price, quality, delivery and customer service. We direct requests for quotations to potential suppliers based on historical pricing data, quality control rankings and geographic proximity to a client or other criteria specified by our clients. In 2017, our top ten suppliers accounted for approximately 12% of our cost of goods sold and no supplier accounted for more than 2% of our cost of goods sold.

We have established a quality control program that is designed to ensure that we deliver high-quality products and services to our clients through the suppliers in our network.

Sales and Marketing

Our account executives sell our marketing execution solutions to corporate clients. As of December 31, 2017, we had approximately 350 sales and account executives. Our agreements with our account executives require them to market and sell our solutions on an exclusive basis and contain non-compete and non-solicitation provisions that apply during and for a specified period after the term of their service.

We expect to continue our growth by recruiting and retaining highly qualified account executives and providing them with the tools to be successful in the marketplace. There are a large number of experienced sales representatives globally and we believe that we will be able to identify additional qualified account executives from this pool of individuals. We also expect to augment our sales force through selective acquisitions of other businesses that offer marketing execution services, including brokers that employ experienced sales personnel with established client relationships.

We believe that we offer account executives an attractive opportunity because they can utilize our vast supplier network, proprietary pricing data and customized order management solution to sell virtually any type of marketing materials at a highly competitive price. In addition, the diverse production and service capabilities of the suppliers in our network provide our account executives the opportunity to deliver a more complete product and service offering to our clients. We believe we can better attract and retain experienced account executives than our competitors because of the breadth of products offered by our supplier network.

To date, we have been successful in attracting and retaining qualified account executives. The on-boarding process consists of training with our sales management, as well as access to a variety of sales and educational resources that are available on our intranet.

8

Competition

Our marketing execution solutions compete with in-house procurement departments in large marketing intensive companies, creative agencies that purchase marketing materials on behalf of their clients in connection with the agencies’ marketing campaign and brand strategy services and companies in several manufacturing industries, including design, graphics art, digital imaging and fulfillment and logistics. As a result, we compete on some level with virtually every company that is involved in printing, from graphic designers to pre-press firms and fulfillment companies.

Our competitors include manufacturers that employ traditional methods of marketing and selling their printed materials. The manufacturers with which we compete generally own and operate their own manufacturing equipment and typically serve clients only within the specific product categories that their equipment produces.

We also compete with manufacturing management firms and brokers. These competitors generally do not own or operate printing equipment and typically work with a limited number of suppliers and have minimal financial investment in the quality of the products produced for their clients. Our industry experience indicates that several of these competitors offer print procurement services or enterprise software applications for the print industry.

The principal elements of competition in marketing materials procurement are price, product quality, customer service, technology and reliability. Although we believe our business delivers products and services on competitive terms, our business and the marketing execution industry are relatively new and are evolving rapidly.

Intellectual Property

We rely primarily on a combination of copyright, patent, trademark and trade secret laws to protect our intellectual property rights. We also protect our proprietary technology through confidentiality and non-disclosure agreements with our employees and independent contractors.

Our IT infrastructure provides a high level of security for our proprietary database. The storage system for our proprietary data is designed to ensure that power and hardware failures do not result in the loss of critical data. The proprietary data is protected from unauthorized access through a combination of physical and logical security measures, including firewalls, antivirus software, intrusion detection software, password encryption and physical security, with access limited to authorized IT personnel. In addition to our security infrastructure, our system data is backed up and stored in a redundant facility on a daily basis to prevent the loss of our proprietary data due to catastrophic failures or natural disasters. We test our overall IT recovery ability and co-location facility semi-annually and test our back-up processes quarterly to verify that we can recover our business critical systems in a timely fashion.

Employees

As of December 31, 2017, we had approximately 2,000 employees and independent contractors in more than 26 countries. We consider our employee relations to be strong.

Our Website

Our website is http://www.inwk.com. We make available, free of charge through our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including exhibits and any amendments to those reports, filed with or furnished to the Securities Exchange Commission ("SEC"). We make these reports available through our website as soon as reasonably practicable after our electronic filing of such materials with or the furnishing of them to, the SEC. The information contained on our website is not a part of this Annual Report on Form 10-K and shall not be deemed incorporated by reference into this Annual Report on Form 10-K or any other public filing made by us to the SEC.

9

Item 1A. Risk Factors

Set forth below are certain risk factors that could harm our business, results of operations and financial condition. You should carefully read the following risk factors, together with the financial statements, related notes and other information contained in this Annual Report on Form 10-K/A. Our business, financial condition and operating results may suffer if any of the following risks are realized. If any of these risks or uncertainties occur, the trading price of our common stock could decline and you might lose all or part of your investment. This Annual Report on Form 10-K/A contains forward-looking statements that contain risks and uncertainties. Please refer to the discussion of “forward-looking statements” on page four of this Annual Report on Form 10-K/A in connection with your consideration of the risk factors and other important factors that may affect future results described below.

Risks Related to Our Business

Competition could substantially impair our business and our operating results

We compete with companies in the manufacturing of marketing related products, including printed materials, in-store displays, packaging materials, graphics art and digital imaging and fulfillment and logistics. Competition in these industries is intense. Our primary competitors are manufacturers that employ traditional methods of marketing and selling their marketing materials. Some of these manufacturers have larger client bases and significantly more resources than we do. Buyers may prefer to utilize the traditional services offered by the manufacturers with whom we compete. Alternatively, some of these manufacturers may elect to offer outsourced print procurement services or enterprise software applications and their well-established client relationships, industry knowledge, brand recognition, financial and marketing capabilities, technical resources and pricing flexibility may provide them with a competitive advantage over us.

We also compete with a number of management firms and brokers. Several of these competitors offer outsourced procurement services or enterprise software applications for the marketing industry. These competitors or new competitors that enter the market, may also offer procurement services similar to and competitive with or superior to, our current or proposed offerings and may achieve greater market acceptance. In addition, a software solution and database similar to our proprietary technology could be created over time by a competitor with sufficient financial resources and comparable industry experience. If our competitors are able to offer comparable services, we could lose clients and our market share could decline.

Our competitors may also establish cooperative relationships to increase their ability to address client needs. Increased competition may lead to revenue reductions, reduced gross margins or a loss of market share, any one of which could harm our business and our operating results.

If our services do not achieve widespread commercial acceptance, our business will suffer.

Most companies currently coordinate the procurement and management of their marketing materials with their own employees using a combination of telephone, e-mail, their own technology platforms and the Internet. Growth in the demand for our services depends on the adoption of our outsourcing model for marketing related procurement services. We may not be able to persuade prospective clients to change their traditional procurement processes. Our business could suffer if our services are not accepted or are not perceived by the marketplace to be effective or valuable.

If our suppliers do not meet our needs or expectations or those of our clients, our business would suffer.

The success of our business depends to a large extent on our relationships with our clients and our reputation for high quality marketing materials and marketing execution services. We do not own manufacturing equipment. Instead, we rely on third-party suppliers to deliver the products and services that we provide to our clients. As a result, we do not directly control the products manufactured or the services provided by our suppliers. If our suppliers do not meet our needs or expectations or those of our clients, our professional reputation may be damaged, our business would be harmed and we could be subject to legal liability.

A significant portion of our revenue is derived from a relatively limited number of large clients and any loss or decrease in sales to these clients could harm our results of operations.

A significant portion of our revenue is derived from a relatively limited number of large clients. Revenue from our top ten clients accounted for 28%, 28% and 27% of our revenue during the years ended December 31, 2017, 2016 and 2015, respectively. Our largest client accounted for 5%, 5% and 5% of our revenue in 2017, 2016 and 2015, respectively. We are likely to continue to

10

experience ongoing client concentration, particularly if we are successful in attracting large clients. Moreover, there may be a loss or reduction in business from one or more of our large clients. It is also possible that revenue from these clients, either individually or as a group, may not reach or exceed historical levels in any future period. The loss or significant reduction of business from our major clients would adversely affect our results of operations.

A significant or prolonged economic downturn or a dramatic decline in the demand for marketing materials, could adversely affect our revenue and results of operations.

Our results of operations are affected directly by the level of business activity of our clients, which in turn is affected by the level of economic activity and cyclicality in the industries and markets that they serve. Certain of our products are sold to industries, including the advertising, retail, consumer products, housing, financial and pharmaceutical industries, that experience significant fluctuations in demand based on general economic conditions, cyclicality and other factors beyond our control. Continued economic uncertainty or an economic downturn could result in a reduction of the marketing budgets of our clients or a decrease in the number of marketing materials that our clients order from us. Reduced demand from one of these industries or markets could negatively affect our revenues, operating income and profitability.

A significant decrease in the number of our suppliers could adversely affect our business.

Our suppliers are not contractually required to continue to accept orders from us. If production capacity at a significant number of our suppliers becomes unavailable, we will be required to use fewer suppliers, which could significantly limit our ability to serve our clients on competitive terms. In addition, we rely on price bids provided by our suppliers to populate our database. If the number of our suppliers decreases significantly, we may not be able to obtain sufficient pricing information for our database, which could adversely affect our ability to obtain favorable pricing for our clients and negatively impact our operating income and profitability.

We may face difficulties as we expand our operations into countries in which we have limited operating experience.

Aggregate revenue from our International segment represented 31%, 33% and 31% of total revenue for the years ended December 31, 2017, 2016 and 2015, respectively. We intend to expand our global footprint, which may involve expanding into countries other than those in which we currently operate or increasing our operations in countries where we currently have limited operations and resources. Our business outside of the United States is subject to various risks, including:

• changes in economic and political conditions;

• changes in and compliance with international and domestic laws and regulations, including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Anti-Bribery Act;

• wars, civil unrest, acts of terrorism and other conflicts;

• natural disasters;

• compliance with and changes in tariffs, trade restrictions, trade agreements and taxation;

• difficulties in managing or overseeing foreign operations;

• limitations on the repatriation of funds because of foreign exchange controls;

• political and economic corruption;

• less developed and less predictable legal systems than those in the United States; and

• intellectual property laws of countries which do not protect our intellectual property rights to the same extent as the laws of the United States.

The occurrence or consequences of any of these factors may lead to significant legal or compliance expenses and may restrict our ability to operate in the affected region or result in the loss of clients in the affected region or other regions, which could adversely affect our revenue, operating income and profitability.

As we expand our business in foreign countries, we will become exposed to increased risk of loss from foreign currency fluctuations and exchange controls, particularly the strengthening of the U.S. dollar against major currencies, as well as longer accounts receivable payment cycles. We have limited control over these risks and if we do not correctly anticipate changes in international economic and political conditions, we may not alter our business practices in time to avoid adverse effects.

The European economy continues to experience overall weakness as a result of lingering high unemployment, sovereign debt issues and tightening of government budgets. Continued weak economic conditions in Europe could adversely affect our results of operations in the European countries in which we conduct business. Additionally, concerns persist regarding the debt burden of certain of the countries that have adopted the Euro currency (the “Euro zone”) and their ability to meet future financial obligations, as well as concerns regarding the overall stability of the Euro to function as a single currency among the diverse economic, social

11

and political circumstances within the Euro zone. We conduct a portion of our business in Euro. Although it remains uncertain whether significant changes in the utilization of the Euro will occur or what the potential impact of such changes in the Euro zone or globally might be, a material shift in circulation of the Euro could result in disruptions to our business and negatively impact our results of operations.

The United Kingdom’s referendum to leave the European Union or “Brexit,” has and may continue to cause disruptions to capital and currency markets worldwide. The full impact of the Brexit decision, however, remains uncertain. A process of negotiation will determine the future terms of the United Kingdom’s relationship with the European Union. During this period of negotiation, our results of operations and access to capital may be negatively affected by interest rate, exchange rate and other market and economic volatility, as well as regulatory and political uncertainty. Brexit may also have a detrimental effect on our customers, distributors and suppliers, which would, in turn, adversely affect our financial condition.

We are subject to taxation related risks in multiple jurisdictions.

We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities, which may have a significant impact on our global provision for income taxes. Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. We are also subject to ongoing tax audits. These audits can involve complex issues, which may require an extended period of time to resolve and can be highly subjective. Tax authorities may disagree with certain tax reporting positions taken by us and, as a result, assess additional taxes against us. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The newly enacted Act, makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017.

The changes effected by the Act required us to remeasure existing deferred tax assets and liabilities using our new statutory rate and to include a provisional one time transition tax expense related to the deemed repatriation of certain foreign earnings and profits. This amount is payable over eight years. We have not completed our accounting for the income tax effects of certain elements of the Act, including the new GILTI and BEAT taxes. Due to the complexity of these new tax rules, we are continuing to evaluate these provisions of the Act. As a result, we have not included an estimate of the tax expense/benefit related to these items for the period ended December 31, 2017.

In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies. Many countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws that, if enacted, could increase our tax obligations in countries where we do business. The impact of tax reform in the US or other foreign tax law changes could result in an overall tax rate increase to our business.

If we are unable to retain and expand the number of our account executives or if a significant number of our account executives leave InnerWorkings, our ability to increase our revenues could be negatively impacted.

Our ability to expand our business will depend largely on our ability to attract and retain account executives with established client relationships. Competition for qualified account executives can be challenging and we may be unable to hire such individuals. Any difficulties we experience in expanding or retaining the number of our account executives could have a negative impact on our ability to expand our client base, increase our revenue and continue our growth.

In addition, we must properly incentivize our account executives to obtain new clients and maintain existing client relationships. If a significant number of our account executives leave InnerWorkings and take their clients with them, our revenue could be negatively impacted. Although we have entered into non-competition agreements with our account executives, we may need to litigate to enforce our rights under these agreements, which could be time-consuming, expensive and ineffective. A significant increase in the turnover rate among our current account executives could also increase our recruiting costs and decrease our operating efficiency and productivity, which could lead to a decline in the demand for our services.

If we are unable to expand our client base, our revenue growth rate may be negatively impacted.

12

As part of our growth strategy, we seek to attract new clients and expand relationships with existing clients. If we are unable to attract new clients or expand our relationships with our existing clients, our ability to grow our business will be hindered.

Most of our clients may terminate their relationships with us on short notice with no or limited penalties.

Many of our clients use our services on an order-by-order basis rather than under long-term contracts. These clients have no obligation to continue using our services and may stop purchasing from us at any time. We have entered into long-term contracts and contract renewals with many of our clients, which are generally for three to five year initial terms. Most of these contracts, however, permit the clients to terminate our engagements upon prior notice, typically ranging from 90 days to 12 months with limited or no penalties.

The volume and type of services we provide our clients may vary from year to year and could be reduced if a client were to change its outsourcing or procurement strategy. If a significant number of our clients elect to terminate or not to renew their engagements with us or if the volume of their orders decreases, our business, operating results and financial condition could suffer.

We may not be able to develop or implement new systems, procedures and controls that are required to support the continued growth in our operations.

Our business continues to grow in size and complexity, and continued growth could place a significant strain on our ability to: 

• recruit, motivate and retain qualified account executives, production managers and management personnel;

• preserve our culture, values and entrepreneurial environment;

• develop and improve our internal administrative infrastructure and execution standards; and

• maintain high levels of client satisfaction.

To manage our growth, we must implement and maintain proper operational and financial controls and systems. Further, we will need to manage our relationships with various clients and suppliers. We cannot give any assurance that we will be able to develop and implement, on a timely basis, the systems, procedures and controls required to support the growth in our operations or effectively manage our relationships with various clients and suppliers. If we are unable to manage our growth, our business, operating results and financial condition could be adversely affected.  

Our business and stock price may be adversely affected if our internal controls over financial reporting are not effective.

As discussed in the Explanatory Note and Note 20 of the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data,” we have restated our historical financial statements for the year ended December 31, 2017 and 2016 and all interim periods therein and revised our historical statements for the year ended December 31, 2015. The determination to restate the financial statements for the Restated Period was made by our Audit Committee upon management’s recommendation to address discovered errors. Due to the errors, our Audit Committee concluded that our previously issued financial statements for the Restated Period should no longer be relied upon. We have filed this Form 10-K/A to, among other things, reflect the correction of errors in the Restated and Revised Periods (collectively, the "Restatement"). In connection with the Restatement, we have identified material weaknesses in our internal control over financial reporting, and management has concluded that our internal control over financial reporting and disclosure controls and procedures were ineffective for the Restated and Revised Periods related to inadequate control to verify the completeness and accuracy of data in certain reports. For a description of the material weaknesses in our internal control over financial reporting and steps taken to remediate the material weaknesses, see Part II, Item 9A, “Controls and Procedures” of this report.

As a result of the circumstances giving rise to the Restatement, we have become subject to a number of additional costs and risks, including unanticipated costs for accounting and legal fees in connection with or related to the Restatement and the remediation of our ineffective disclosure controls and procedures and material weakness in internal control over financial reporting. In addition, the attention of our management team has been diverted by these efforts. We are subject to shareholder, governmental and other actions in connection with the Restatement and related matters. If we cannot produce reliable financial reports, investors could lose confidence in our reported financial information, the market price of our common stock could decline significantly, we may be unable to obtain additional financing to operate and expand our business and our business. In addition, the Restatement and related matters could impair our reputation or could cause our counterparties to lose confidence in us. Each of these occurrences could have a material adverse effect on our business, financial condition, results of operations and stock price. In addition, we cannot assure that we will not discover other material weaknesses in the future.

13

We adopted the new required revenue recognition standard, which took effect as of January 1, 2018, and we may have difficulties implementing this standard.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Update No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), which has been subsequently updated. We adopted the provisions in ASC 606, as amended, on January 1, 2018 under the modified retrospective method and will only apply this method to contracts that are not completed as of the date of adoption. To comply with the requirements of ASC 606 as of January 1, 2018, we are continuing to update and enhance our internal accounting systems, operational processes and our internal controls over financial reporting. If we are not successful in updating our policies, procedures, information systems and internal controls over financial reporting, the revenue that we recognize and the related disclosures that we provide under ASC 606 may not be complete or accurate, which could harm our operating results or cause us to fail to meet our reporting obligations. This implementation work has required, and will continue to require, additional investments by us, which could increase our operating costs in future periods. Further, the regulatory guidance for ASC 606 will likely evolve over time, which could adversely impact our financial results (including potentially results reported prior to such evolution) and require changes to our disclosures and internal systems, processes, and controls.

The global integration of our technology platform may result in business interruptions.

We are currently implementing a common technology platform across our global operations. The implementation of and such changes to our technology platform and related software carry risks such as cost overruns, project delays and business interruptions and delays. If we experience a material business interruption as a result of this process, it could have a material adverse effect on our business, financial position and results of operations.

Security and privacy breaches may damage client relations and inhibit our growth.

The secure and uninterrupted operation of our information technology systems is critical to our business. Despite the security measures that we have implemented, including those measures related to cybersecurity, our systems, as well as those of our customers, suppliers and other service providers could be breached or damaged by computer viruses, malware, phishing attacks, denial-of-service attacks, natural or man-made incidents or disasters, or unauthorized physical or electronic access. These types of incidents have become more prevalent and pervasive across industries, including in our industry, and are expected to continue in the future. A breach could result in business disruption, theft of our intellectual property, trade secrets or customer information and unauthorized access to personnel information. Although cybersecurity and the continued development and enhancement of our controls, processes and practices designed to protect our information technology systems from attack, damage or unauthorized access are a high priority for us, our activities and investment may not be deployed quickly enough or successfully protect our systems against all vulnerabilities, including technologies developed to bypass our security measures. In addition, outside parties may attempt to fraudulently induce employees or customers to disclose access credentials or other sensitive information in order to gain access to our secure systems and networks. There are no assurances that our actions and investments to improve the maturity of our systems, processes and risk management framework or remediate vulnerabilities will be sufficient or completed quickly enough to prevent or limit the impact of any cyber intrusion. Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks and we cannot predict the extent, frequency or impact these problems may have on us. To the extent that our business is interrupted or data is lost, destroyed or inappropriately used or disclosed, such disruptions could adversely affect our competitive position, relationships with our customers, financial condition, operating results and cash flows. In addition, we may be required to incur significant costs to protect against the damage caused by these disruptions or security breaches in the future.

We are also dependent on security measures that some of our third-party customers, suppliers and other service providers take to protect their own systems and infrastructures. Some of these third parties store or have access to certain of our sensitive data, as well as confidential information about their own operations, and as such are subject to their own cybersecurity threats.

Any security breach of any of these third-parties’ systems could result in unauthorized access to our information technology systems, cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence in our products and services, any of which could adversely affect our financial performance.

A decrease in levels of excess capacity in the commercial print industry could have an adverse impact on our business.

We believe that for the past several years the U.S. commercial print industry has experienced significant levels of excess capacity. Our business seeks to capitalize on imbalances between supply and demand in the print industry by obtaining favorable pricing terms from suppliers in our network with excess capacity. Reduced excess capacity in the print industry generally and in our

14

supplier network specifically, could have an adverse impact on our ability to execute our business strategy and on our business results and growth prospects.

Our inability to protect our intellectual property rights may impair our competitive position.

If we fail to protect our intellectual property rights adequately, our competitors could replicate our proprietary technology and processes and offer similar services, which would harm our competitive position. We rely primarily on a combination of copyright, patent, trademark and trade secret laws and confidentiality and nondisclosure agreements to protect our proprietary technology. We cannot be certain that the steps we have taken to protect our intellectual property rights will be adequate or that third parties will not infringe or misappropriate our rights or imitate or duplicate our services and methodologies. We may need to litigate to enforce our intellectual property rights or determine the validity and scope of the rights of others. Any such litigation could be time-consuming and costly.

If we are unable to maintain our proprietary technology, demand for our services and therefore our revenue could decrease.

We rely heavily on our proprietary technology to procure marketing materials for our clients. To keep pace with changing technologies and client demands, we must correctly interpret and address market trends and enhance the features and functionality of our technology in response to these trends, which may lead to significant research and development costs. We may be unable to accurately determine the needs of buyers or the trends in the marketing industry or to design and implement the appropriate features and functionality of our technology in a timely and cost-effective manner, which could result in decreased demand for our services and a corresponding decrease in our revenue.

In addition, we must protect our systems against physical damage from fire, earthquakes, power loss, telecommunications failures, computer viruses, hacker attacks, physical break-ins and similar events. Any software or hardware damage or failure that causes interruption or an increase in response time of our proprietary technology could reduce client satisfaction and decrease usage of our services.

If the key members of our management team do not remain with us in the future, our business, operating results and financial condition could be adversely affected.

Our future success will depend to a significant extent on the successful transition of Chief Executive Officer responsibilities from Eric Belcher, our former Chief Executive Officer, to Rich Stoddart, our current Chief Executive Officer. In addition, our future success will depend to a significant extent on the continued services of Rich Stoddart, Charles Hodgkins, our Interim Chief Financial Officer, Robert Burkart, our Chief Information Officer and Ron Provenzano, our General Counsel. The loss of the services of these individuals could adversely affect our business, operating results and financial condition and could divert other senior management time in searching for their replacements.

We may not be able to identify suitable acquisition candidates, effectively integrate newly acquired businesses or achieve expected profitability from acquisitions.

Part of our growth strategy is to increase our revenue and the markets that we serve through the acquisition of additional businesses. We are actively considering certain acquisitions and will likely consider others in the future. There can be no assurance that suitable candidates for acquisitions can be identified or, if suitable candidates are identified, that acquisitions can be completed on acceptable terms, if at all. Even if suitable candidates are identified, any future acquisitions may entail a number of risks that could adversely affect our business and the market price of our common stock, including the integration of the acquired operations, diversion of management’s attention, risks of entering markets in which we have limited experience, adverse short-term effects on our reported operating results, the potential loss of key employees of acquired businesses and risks associated with unanticipated liabilities.

We have used and expect to continue to use, shares of our common stock to pay for all or a portion of our acquisitions. If the owners of potential acquisition candidates are not willing to receive our common stock in exchange for their businesses, our acquisition prospects could be limited. Future acquisitions could also result in accounting charges, potentially dilutive issuances of equity securities and increased debt and contingent liabilities, including liabilities related to unknown or undisclosed circumstances, any of which could have a material adverse effect on our business and the market price of our common stock.

Our business is subject to seasonal sales fluctuations, which could result in volatility or have an adverse effect on the market price of our common stock.

15

Our business is subject to some degree of sales seasonality. Historically, the percentage of our annual revenue earned during the third and fourth fiscal quarters has been higher due, in part, to a greater number of orders for marketing materials in anticipation of the year-end holiday season. If our business continues to experience seasonality, we may incur significant additional expenses during our third and fourth quarters, including additional staffing expenses. Consequently, if we were to experience lower than expected revenue during any future third or fourth quarter, whether from a general decline in economic conditions or other factors beyond our control, our expenses may not be offset, which would have a disproportionate impact on our operating results and financial condition for that year. Such fluctuations in our operating results could result in volatility or have an adverse effect on the market price of our common stock.

Price fluctuations in raw materials costs could adversely affect the margins on our orders.

Our business relies on a constant supply of various raw materials, including paper and ink. Prices within the print industry are directly affected by the cost of paper, which is purchased in a price sensitive market that has historically exhibited price and demand cyclicality. Prices are also affected by the cost of ink. Our profit margin and profitability are largely a function of the rates that our suppliers charge us compared to the rates that we charge our clients. If our suppliers increase the price of our orders and we are not able to find suitable or alternative suppliers, our profit margin may decline.

If any of our products cause damages or injuries, we may experience product liability claims.

Clients and third parties who claim to suffer damages or an injury caused by our products may bring lawsuits against us. Defending lawsuits arising out of any of the products we provide to our clients could be costly and absorb substantial amounts of management attention, which could adversely affect our financial performance. A significant product liability judgment against us could harm our reputation and business.

If any of our key clients fails to pay for our services, our profitability would be negatively impacted.

In general, we take full title and risk of loss for the products we procure from our suppliers. Our obligation to pay our suppliers is not contingent upon receipt of payment from our clients. In 2017, 2016 and 2015, our revenue was $1,138.4 million, $1,094.4 million and $1,028.9 million, respectively and our top ten clients accounted for 28%, 28% and 27%, respectively, of such revenue. If any of our key clients fails to pay for our services, our profitability would be negatively impacted.

Our ability to raise capital in the future may be limited and our failure to raise capital when needed could prevent us from growing.

We may in the future be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms or at all and our failure to raise capital when needed could harm our business. Additional equity financing may be dilutive to the holders of our common stock and debt financing, if available, may involve restrictive covenants and could reduce our profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.

Risks Related to Ownership of Our Common Stock

The trading price of our common stock has been and may continue to be volatile.

The trading prices of many small and mid-cap companies are highly volatile. Since our initial public offering in August 2006 through December 31, 2017, the closing sale price of our common stock as reported by the Nasdaq Global Market has ranged from a low of $1.92 on March 2, 2009 to a high of $18.69 on October 9, 2007.

Certain factors may continue to cause the market price of our common stock to fluctuate, including:

• fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

• changes in market valuations of similar companies;

• changes in economic and political conditions in the United States or abroad;

• success of competitive products or services;

• changes in our capital structure, such as future issuances of debt or equity securities;

• announcements by us, our competitors, our clients or our suppliers of significant products or services, contracts, acquisitions or strategic alliances;

• regulatory developments in the United States or foreign countries;

16

• litigation involving our company, our general industry or both;

• additions or departures of key personnel;

• investors’ general perception of us; and

• changes in general industry and market conditions.

In addition, if the stock market experiences a loss of investor confidence, then the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that could be costly to defend and a distraction to management. As a result, you could lose all or part of your investment.

Our quarterly results are difficult to predict and may vary from quarter to quarter, which may result in our failure to meet the expectations of investors and increased volatility of our stock price.

The continued use of our services by our clients depends, in part, on the business activity of our clients and our ability to meet their cost saving needs, as well as their own changing business conditions. The time between our payment to the supplier and our receipt of payment from our clients varies with each job and client. In addition, a significant percentage of our revenue is subject to the discretion of our clients, who may stop using our services at any time, subject, in the case of most of our clients, to advance notice requirements. Therefore, the number, size and profitability of jobs may vary significantly from quarter to quarter. As a result, our quarterly operating results are difficult to predict and may fall below the expectations of current or potential investors in some future quarters, which could lead to significant variations in the market price of our stock. The factors that are likely to cause these variations include:

• the demand for our marketing execution solutions;

• the use of outsourced enterprise solutions;

• clients’ business decisions regarding the quantities of marketing materials they purchase;

• the number, timing and profitability of our jobs, unanticipated contract terminations and job postponements;

• new product introductions and enhancements by our competitors;

• changes in our pricing policies;

• our ability to manage costs, including personnel costs; and

• costs related to possible acquisitions of other businesses.

We do not currently intend to pay dividends, which may limit the return on your investment.

We have not declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.

If our board of directors authorizes the issuance of preferred stock, holders of our common stock could be diluted and harmed.

Our board of directors has the authority to issue up to 5,000,000 shares of preferred stock in one or more series and to establish the preferred stock’s voting powers, preferences and other rights and qualifications without any further vote or action by the stockholders. The issuance of preferred stock could adversely affect the voting power and dividend liquidation rights of the holders of common stock. In addition, the issuance of preferred stock could have the effect of making it more difficult for a third party to acquire or discouraging a third party from acquiring, a majority of our outstanding voting stock or otherwise adversely affect the market price of our common stock. It is possible that we may need to raise capital through the sale of preferred stock in the future.

17

Item 1B. Unresolved Staff Comments

None.  

Item 2. Properties

Properties

Our principal executive offices are located in Chicago, Illinois. We have 26 other office locations in the United States and 41 office locations in 26 other countries around the world. These other offices are located in Canada, Chile, Brazil, Peru, Mexico, Argentina, the United Kingdom, France, Czech Republic, Germany, Ireland, Russia, China, Hong Kong, Japan, Australia and various other countries and are principally used for sales, operations, finance, administration and warehousing. We believe that our facilities are generally suitable to meet our needs for the foreseeable future; however, we will continue to seek additional space as needed to satisfy our growth. All of the properties where we conduct our business are leased. The terms of the leases vary and have expiration dates ranging from December 31, 2017 to December 22, 2026.

Item 3. Legal Proceedings

We are party to various legal proceedings incidental to our business. Certain claims, suits and complaints arising in the ordinary course of business have been filed or are pending against us. Based on facts now known, we believe all such matters are adequately provided for, covered by insurance, are without merit, and/or involve such amounts that would not materially adversely affect our consolidated results of operations, cash flows or financial position.

For information on our non-ordinary course legal proceedings, see Note 9 to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is listed and traded on the Nasdaq Global Select Market under the symbol “INWK”. The following table sets forth the high and low sales prices for our common stock as reported by the Nasdaq Global Select Market for each of the periods listed.

18

	High		Low
2017
First Quarter	$	11.00	$	9.08
Second Quarter	$	11.94	$	9.55
Third Quarter	$	11.92	$	10.08
Fourth Quarter	$	12.03	$	9.81
2016
First Quarter	$	8.02	$	6.06
Second Quarter	$	8.87	$	7.59
Third Quarter	$	10.08	$	8.08
Fourth Quarter	$	10.08	$	8.07

Holders

As of July 27, 2018, there were 28 holders of record of our common stock, which does not include stockholders who held their shares through brokers or other nominees in "street name." The holders of our common stock are entitled to one vote per share.

Dividends

We currently do not and do not intend to pay any dividends on our common stock. We intend to retain all available funds and any future earnings for use in the operation and expansion of our business. Any determination in the future to pay dividends will depend upon our financial condition, capital requirements, operating results and other factors deemed relevant by our board of directors, including any contractual or statutory restrictions on our ability to pay dividends.

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

On February 12, 2015, we announced that our Board of Directors approved a share repurchase program providing us authorization to repurchase up to an aggregate of $20.0 million of our common stock through open market and privately negotiated transactions over a two-year period. On November 2, 2016, the Board of Directors approved a two-year extension to the share repurchase program through February 28, 2019.

Additionally, on May 4, 2017, the Board of Directors authorized the repurchase of up to an additional $30.0 million of our common stock through open market and privately negotiated transactions over a two-year period ending May 31, 2019. The timing and amount of any share repurchases will be determined based on market conditions, share price and other factors, and the program may be discontinued or suspended at any time. Repurchases will be made in compliance with SEC rules and other legal requirements. As of December 31, 2017, an aggregate of $34.1 million remained available for repurchase under these repurchase authorizations.

During the twelve months ended December 31, 2017, the Company repurchased 1,121,928 shares of the Company's common stock for $11.0 million in the aggregate at an average cost of $9.78 per share under its repurchase program. An additional 183,529 shares of its common stock were withheld to satisfy the mandatory tax withholding requirements upon vesting of restricted stock for $1.9 million at an average cost of $10.57 per share.

The following table provides information relating to our purchase of shares of our common stock in the fourth quarter of 2017 (in thousands, except per share amounts): 

19

Period	Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1)
10/1/17-10/31/17	—	$	—	—	3,259
11/1/17-11/30/17	4	10.32		—	3,232
12/1/17-12/31/17	170	10.07		93	3,402
Total	174	$	10.07	93

(1) The share repurchase plan authorized by our Board of Directors allows repurchases of up to $50 million of our common stock.  The maximum number of shares that may yet be repurchased under the plan is estimated using the closing share price on the last day of each period presented.

Stock Performance Graph

The information contained in the following chart is not considered to be “soliciting material,” or “filed,” or incorporated by reference in any past or future filing by the Company under the Securities Act or Exchange Act unless and only to the extent that, the Company specifically incorporates it by reference.

The following graph assumes $100 was invested on December 31, 2012 in the common stock of the Company and each of the following indices and assumes reinvestment of any dividends. The stock price performance on the graph below is not necessarily indicative of future stock price performance.

	Dec 31, 2012		Dec 31, 2013		Dec 31, 2014		Dec 31, 2015		Dec 31, 2016		Dec 31, 2017
INWK	$	100	$	57	$	57	$	54	$	71	$	73
NASDAQ Market Index	$	100	$	138	$	157	$	166	$	178	$	229
Dow Jones Business Support Services Index	$	100	$	133	$	137	$	150	$	169	$	212

20

Item 6. Selected Financial Data

As discussed further in Note 20 of the "Notes to the Consolidated Financial Statements" contained in Item 8 of this Form 10-K/A, we have restated our consolidated financial statements to correct certain errors in our previously issued financial statements. The following table presents selected consolidated financial and other data as of and for the periods indicated. You should read the following information together with the more detailed information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes.

	Year ended December 31,
	2017			2016			2015			2014			2013
	(as restated)			(as restated)			(as revised)			(as revised)			(as revised)
	(in thousands, except per share amounts)
Consolidated statements of operations data:
Revenue	$	1,138,361		$	1,094,402		$	1,028,892		$	991,250		$	891,975
Cost of goods sold	862,903			831,838			788,862			761,465			689,229
Gross profit	275,458			262,564			240,030			229,785			202,746
Selling, general and administrative expenses	227,253			209,524			197,247			196,826			183,637
Depreciation and amortization	13,390			17,916			17,472			17,723			13,664
Change in fair value of contingent consideration	677			10,417			(270		)	(37,873		)	(31,331		)
Goodwill impairment charge	—			—			37,539			—			37,908
Intangible asset impairment charges	—			70			202			2,710			—
Restructuring charges	—			5,615			1,053			—			4,322
Income (loss) from operations	34,138			19,022			(13,213		)	50,399			(5,454		)
Interest income	97			86			69			57			76
Interest expense	(4,729		)	(4,171		)	(4,612		)	(4,428		)	(2,954		)
Other, net	(1,788		)	(154		)	(3,135		)	(747		)	(357		)
Total other expense	(6,420		)	(4,239		)	(7,678		)	(5,118		)	(3,235		)
Income (loss) before income taxes	27,718			14,783			(20,891		)	45,281			(8,689		)
Income tax expense (benefit)	11,288			10,834			11,498			3,020			(349		)
Net income (loss)	$	16,430		$	3,949		$	(32,389	)	$	42,261		$	(8,340	)
Net income (loss) per share of common stock:
Basic	$	0.31		$	0.07		$	(0.61	)	$	0.81		$	(0.16	)
Diluted	$	0.30		$	0.07		$	(0.61	)	$	0.80		$	(0.16	)
Shares used in per share calculations:
Basic	53,851			53,607			52,791			52,096			50,875
Diluted	54,944			54,460			52,791			53,104			50,875
Consolidated balance sheet data:
Cash and cash equivalents	$	30,562		$	30,924		$	30,755		$	22,578		$	18,606
Working capital(1)	135,273			101,739			77,357			87,905			52,004
Total assets	649,638			593,987			601,251			625,067			609,645
Revolving credit facility(2)	128,398			107,468			99,258			104,539			69,000
Total stockholders’ equity	284,545			262,161			252,432			290,260			241,905

(1) Working capital represents accounts receivable, unbilled revenue, inventories, prepaid expenses and other current assets, offset by accounts payable, accrued expenses and other current liabilities.

(2) The Company entered into a Credit Agreement, dated as of August 2, 2010, subsequently amended most recently as of February 3, 2017, to fund acquisitions and for general working capital purposes.

21

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes, which appear elsewhere in this Annual Report on Form 10-K/A. It contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Annual Report on Form 10-K/A, particularly in Part I, Item 1A, “Risk Factors.” All amounts set forth in this Management’s Discussion and Analysis have been adjusted to reflect the Restatement.

Overview

We are a leading global marketing execution firm for some of the world's most marketing intensive companies, including those in the Fortune 1000. As a comprehensive outsourced global solution, we leverage proprietary technology, an extensive supplier network and deep domain expertise to streamline the creation, production and distribution of marketing and promotional materials, signage and displays, retail experiences, events and promotions and product packaging across every major market worldwide. The items we source generally are procured through the marketing supply chain and we refer to these items collectively as marketing materials. Through our network of more than 8,000 global suppliers, we offer a full range of fulfillment and logistics services that allow us to procure marketing materials of virtually any kind. The breadth of our product offerings and services and the depth of our supplier network enable us to fulfill the marketing materials procurement needs of our clients.

Our proprietary software applications and databases create a fully-integrated solution that stores, analyzes and tracks the production capabilities of our supplier network, as well as detailed pricing data. As a result, we believe we have one of the largest independent repositories of supplier capabilities and pricing data for suppliers of marketing materials around the world. Our technology and databases of product and supplier information are designed to capitalize on excess manufacturing capacity and other inefficiencies in the traditional marketing materials supply chain to obtain favorable pricing while delivering high-quality products and services for our clients.

We use our supplier capability and pricing data to match orders with suppliers that are optimally suited to meet the client's needs at a highly competitive price. By leveraging our technology and data, our clients are able to reduce overhead costs, redeploy internal resources and obtain favorable pricing and service terms. In addition, our ability to track individual transactions and provide customized reports detailing procurement activity on an enterprise-wide basis provides our clients with greater visibility and control of their marketing materials expenditures.

We generate revenue by procuring and purchasing marketing materials from our suppliers and selling those products to our clients. We procure products for clients across a wide range of industries, such as retail, financial services, hospitality, consumer packaged goods, non-profits, healthcare, pharmaceuticals, food and beverage, broadcasting and cable and transportation.

As of December 31, 2017, we had approximately 2,000 employees and independent contractors in more than 26 countries. Effective with the first fiscal quarter of 2016, we organized our operations into two operating segments based on geographic regions: North America and International. The North America segment includes operations in the United States and Canada; the International segment includes operations in Mexico, South America, Central America, Europe, the Middle East, Africa and Asia. In 2017, we generated global revenue from third parties of $780.5 million in the North America segment and $357.9 million in the International Segment. We believe the opportunity exists to expand our business into new geographic markets. Our objective is to continue to increase our sales in the United States and internationally by adding new clients and increasing our sales to existing clients through additional marketing execution services or geographic markets. We intend to hire or acquire more account executives within close proximity to these large markets.

Restatement and Revision of Previously Issued Financials

As previously discussed in the Explanatory Note at the beginning of this Form 10-K/A and as further discussed in Notes 20 and 21 of the Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” we have restated our consolidated financial statements for the years ended December 31, 2017 and 2016 and all interim periods therein and revised our consolidated financial statements for the year ended December 31, 2015. Our restated and revised financial statements correct our accounting for recording a portion of costs of goods sold in the incorrect periods and have no material impact on our cash flow or liquidity. The restated financial statements also correct include adjustments for certain immaterial accounting errors related to all periods covered in this Form 10-K/A, which are immaterial individually and in the aggregate.

22

The corrections contained in these restated financial statements, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.

Revenue

We generate revenue through the procurement of marketing materials for our clients. Our annual revenue was $1,138.4 million, $1,094.4 million and $1,028.9 million in 2017, 2016 and 2015, respectively, reflecting growth rates of 4.0% and 6.4% in 2017 and 2016, respectively, as compared to the corresponding prior year.

Our revenue consists of the prices paid to us by our clients for marketing materials. These prices, in turn, reflect the amounts charged to us by our suppliers plus our gross profit. Our gross profit margin may be fixed by contract or may depend on prices negotiated on a job-by-job basis. Once the client accepts our pricing terms, the selling price is established and we procure the product for our own account in order to re-sell it to the client. We generally take full title and risk of loss for the product upon shipment. The finished product is typically shipped directly from our supplier to a destination specified by our client. Upon shipment, our supplier invoices us for its production costs and we invoice our client.

Cost of Goods Sold and Gross Profit

Our cost of goods sold consists primarily of the price at which we purchase products from our suppliers. Our selling price, including our gross profit, may be established by contract based on a fixed gross profit as a percentage of revenue, which we refer to as gross margin, or may be determined at the discretion of the account executive or production manager within predetermined parameters. Our gross profit for years ended December 31, 2017, 2016 and 2015 was $275.5 million, $262.6 million and $240.0 million or 24.2%, 24.0% and 23.3% of revenue, respectively.

Operating Expenses and Income (Loss) from Operations

Our selling, general and administrative expenses consist of commissions paid to our account executives, compensation costs for our management team and production managers as well as compensation costs for our finance and support employees, public company expenses and corporate systems, legal and accounting, facilities and travel and entertainment expenses. Selling, general and administrative expenses as a percentage of revenue were 20.0%, 19.1% and19.2% in 2017, 2016 and 2015, respectively.

We accrue for commissions when we recognize the related revenue and gross profit. Some of our account executives receive a monthly draw to provide them with a more consistent income stream. The cash paid to our account executives in advance of commissions earned is reflected as a prepaid expense on our balance sheet. As our account executives earn commissions, a portion of their commission payment is withheld and offset against their prepaid commission balance, if any. Our prepaid commission balance, net of accrued earned commissions not yet paid, decreased from $0.7 million as of December 31, 2016 to a net accrued commission amount of $(3.3) million as of December 31, 2017.

We agree to provide our clients with marketing materials that conform to the industry standard of a “commercially reasonable quality,” and our suppliers in turn agree to provide us with products of the same quality. In addition, the quotes we execute with our clients include customary industry terms and conditions that limit the amount of our liability for product defects. Product defects have not had a material adverse effect on our results of operations to date.

We are required to make payment to our suppliers for completed jobs regardless of whether our clients make payment to us. Our bad debt expense was approximately $0.5 million, $2.2 million and $1.7 million in 2017, 2016 and 2015, respectively.

Our income (loss) from operations for 2017, 2016 and 2015 was $34.1 million, $19.0 million and $(13.2) million, respectively.

23

Critical Accounting Policies

Revenue Recognition

The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which is typically met upon shipment or delivery of our products to customers: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders and (iv) collectability is reasonably assured. Unbilled revenue represents shipments or deliveries that have been made to customers for which the related account receivable has not yet been invoiced.

In accordance with ASC 605-45, Revenue Recognition – Principal Agent Considerations, we generally report revenue on a gross basis because we are the primary obligor in our arrangements to procure marketing materials and other products for our customers. Under these arrangements, we are responsible for the fulfillment, including the acceptability, of the marketing materials and other products. In addition, we (i) determine which suppliers are included in our network, (ii) have discretion to select from among the suppliers within our network, (iii) are obligated to pay our suppliers regardless of whether we are paid by our customers and (iv) have reasonable latitude to establish exchange price. In some transactions, we also have general inventory risk and are involved in the determination of the nature or characteristics of the marketing materials and products. When we are not the primary obligor, revenues are reported on a net basis.

We recognize revenue for creative and other services provided to our customers which may be delivered in conjunction with the procurement of manufactured materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. We recognize revenue for creative and other services provided on a stand-alone basis upon completion of the service. Service revenue has not been material to our overall revenue to date.

Accounts Receivable and Allowance for Doubtful Accounts

The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. Management reviews all accounts receivable balances and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. These estimates of balances that will not be collected are based on historical write offs and recoveries of accounts receivable. The estimates of recovery can change based on actual experience and therefore can affect the level of reserves we place on existing accounts receivable. Fully reserved receivables are reviewed on a monthly basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted. We believe our reserve level is appropriate considering the quality of the portfolio as of December 31, 2017. While credit losses have historically been within expectations and the provisions established, we cannot guarantee that our credit loss experience will continue to be consistent with historical experience.

Goodwill

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"), goodwill is not amortized, but instead is tested for impairment annually or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, we test for goodwill impairment the first day of the fourth fiscal quarter of each year.

Under ASC 350, an entity is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the quantitative test is required, in the first step, the fair value for each reporting unit is compared to its book value including goodwill. In the case that the fair value is less than the book value, a second step is performed which compares the implied fair value of goodwill to the book value of goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair values of the identifiable assets and liabilities. If the implied fair value of the goodwill is less than the book value of the goodwill, the difference is recognized as an impairment.

We performed our impairment test as of October 1, 2017, our measurement date, and concluded there was no impairment in any of our reporting units. We also concluded that no goodwill impairment existed as of December 31, 2017.

In the fourth quarter of 2015, we determined that our goodwill was impaired and recorded a non-cash, goodwill impairment charge of $37.5 million at the EMEA reporting unit as a result of the test. For additional information related to the goodwill impairment in 2015, see the discussion of our results of operations below.

24

Subsequent to the issuance of the Company's March 12, 2018 earnings release, the Company made an additional currency adjustment to the book value of its goodwill. This resulted in a reduction of goodwill and other comprehensive income of $7.2 million reflected in the fourth quarter of 2017. This adjustment had no impact on the statement of operations or the statement of cash flows.

Other Intangible Assets

Intangible assets other than goodwill acquired in business combinations are recorded at fair value. We review each business acquisition to identify intangible assets other than goodwill acquired, which include customer lists, non-competition agreements, patents, trade names and trademarks. Our significant acquired intangible assets subject to estimation of fair value primarily include acquired customer lists. For customer list assets, the nature of the customer relationships makes an estimation of the reproduction or replacement costs highly subjective. As there is a specific earnings stream that can be associated exclusively with the customer relationships, we believe that the discounted cash flow method is the most appropriate valuation methodology to determine the fair value of the customer relationships.

ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to the estimated residual values and reviewed for impairment when impairment indicators exist. Our intangible assets consist of customer lists, trade names, noncompetion agreements and patents. Our customer lists are being amortized using the economic useful life method over their estimated weighted-average useful lives of approximately 14 years. Our noncompetion agreements, trade names and patents are being amortized on the straight-line basis over their estimated weighted-average useful lives. As of December 31, 2017, the net balance of our intangible assets was $27.6 million.

During 2017, the Company did not record any impairment related to these intangible assets.

During the fourth quarter of 2016, the Company recorded a non-cash, intangible asset impairment charge of $0.1 million related to a trade name acquired in a prior year business combination in the International segment.

Contingent Purchase Consideration

In connection with some of our business acquisitions accounted for under ASC 805, contingent consideration is payable in cash or shares of our common stock upon the achievement of certain performance measures over future periods. For these acquisitions, we have estimated and recorded the fair value of the purchase consideration obligation, whereby fair value is determined based on the present value of the potential contingent purchase price. Changes in estimated fair value of the contingent purchase consideration obligations are recorded in our results from operations. Adjustments to the estimated fair value of the contingent purchase consideration are based on estimates of probability of achievement of earnings targets based on actual results and forecasts of the earnings of the companies acquired. These forecast estimates can change based on macroeconomic conditions as well as the overall success of the business in retaining existing business and gaining new business. As of December 31, 2017, there are no outstanding contingent consideration liabilities.

Stock-Based Compensation

We account for stock-based compensation awards in accordance with ASC 718, Compensation-Stock Compensation. Compensation expense is measured by determining the fair value of each award using the Black-Scholes option valuation model for stock options or the closing share price for restricted shares. The fair value is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. This valuation model requires assumptions, which impact the assumed fair value, including the expected life of the stock option, the risk-free interest rate, expected volatility of the stock over the expected life and the expected dividend yield. We use historical data to determine these assumptions and if these assumptions change significantly for future grants, share-based compensation expense will fluctuate in future years.

Expected term is estimated based on historical experience related to similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. We believe that historical experience provides the best estimate of future expected life. The risk-free interest rate is based on actual U.S. Treasury zero-coupon rates for bonds commensurate with the expected term. The expected volatility assumption is based on the historical volatility of our common stock over a period commensurate with the expected term. Forfeitures are recorded as they occur.

We recorded $6.8 million, $5.6 million and $5.9 million in compensation expense related to stock-based compensation, for the years ended December 31, 2017, 2016 and 2015, respectively. 

Income Taxes

25

We operate in numerous states and countries through our various subsidiaries and must allocate our income, expenses and earnings under the various laws and regulations of each of these taxing jurisdictions. Accordingly, our provision for income taxes represents our total estimate of the liability that we have incurred in doing business each year in all of our locations. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. In determining whether we need to record a valuation allowance against our deferred tax assets, management must make a number of estimates, assumptions and judgments. We establish a valuation allowance to reduce deferred tax assets to the amount we believe is more likely than not to be realized. The determination to record or release valuation allowances requires significant judgment.

Recent Accounting Pronouncements

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Scope of Modification Accounting ("ASU 2017-09"), which amends ASC 718, Compensation - Stock Compensation. This ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. This ASU is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the consolidated financial statements and related disclosures.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company's consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, ("ASU 2016-09") which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Under the standard, the income tax effects of awards are required to be recognized in the income statement when the awards vest or are settled, as opposed to in additional paid-in capital under the current guidance. The standard also provides an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, which the Company has elected to adopt. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. In the first quarter of 2017, the Company applied a modified retrospective transition method to account for the changes under the standard related to income taxes and the policy election for recording forfeitures as they occur.

The Company adopted all amendments to the standard at January 1, 2017. The amendments related to the classification of excess tax benefits on the statement of cash flows were adopted prospectively and the classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes was adopted retrospectively. The adoption of both resulted in no prior period adjustments. With the adoption of the standards related to eliminating the requirement that excess tax benefits be realized before companies can recognize them and election to recognize forfeitures as they occur, the Company elected to use the modified retrospective method which resulted in changes to retained earnings, components of equity and net assets. The net cumulative effect of these changes resulted in a $2.1 million increase to additional paid in capital, a $2.3 million decrease to deferred tax liabilities and a $0.2 million increase to retained earnings.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), ("ASU 2016-02"), which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosure of key information about leasing arrangements. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for most leases in the balance sheet as well as other qualitative and quantitative disclosures. The update

26

is to be applied using a modified retrospective method and is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The FASB has issued several amendments to the standard since ASU 2014-09.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective transition method). The Company will adopt ASU 2014-09 on January 1, 2018 using the modified retrospective transition method.

The Company is finalizing updates to the accounting policies and processes to address the variations from current practices, inclusive of the required additional disclosures in the period subsequent to adoption. Specifically, under the current guidance, the Company defers revenue for inventory billed but not yet shipped. As a result of the adoption of the new guidance, in certain situations the Company may be able to recognize revenue for inventory billed but not yet shipped, which could accelerate the timing, but not the total amount, of revenue recognized and would not impact the timing of cash flows. We are in the process of finalizing the measurement of the cumulative effect of adopting the new guidance.

The Company’s analysis of its contracts under the new standard supports two historical conclusions of the Company and its current revenue policy: 1) the Company typically recognizes revenue at a point in time rather than over a period of time and, 2) the Company typically recognizes revenue on a gross basis when the Company is the primary obligor. We plan to issue further disclosures around the adoption of ASC 606 Revenue from Contracts with Customers as part of our first quarter 2018 Form 10-Q filing.

27

Results of Operations

The following table sets forth our consolidated statements of operations data for the periods presented as a percentage of our revenue:

	Year ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Revenue	100.0	%	100.0	%	100.0	%
Cost of goods sold	75.8	%	76.0	%	76.7	%
Gross profit	24.2	%	24.0	%	23.3	%
Operating expenses:
Selling, general and administrative expenses	20.0	%	19.1	%	19.2	%
Depreciation and amortization	1.2	%	1.6	%	1.7	%
Change in fair value of contingent consideration	0.1	%	1.0	%	—	%
Goodwill impairment charge	—	%	—	%	3.6	%
Intangible asset impairment charges	—	%	—	%	—	%
Restructuring charges	—	%	0.5	%	0.1	%
Income (loss) from operations	3.0	%	1.7	%	(1.3	)%
Other income (expense):
Interest income	—	%	—	%	—	%
Interest expense	(0.4	)%	(0.4	)%	(0.4	)%
Other, net	(0.2	)%	—	%	(0.3	)%
Total other expense	(0.6	)%	(0.4	)%	(0.7	)%
Income (loss) before taxes	2.4	%	1.4	%	(2.0	)%
Income tax expense	1.0	%	1.0	%	1.1	%
Net income (loss)	1.4	%	0.4	%	(3.1	)%

Comparison of years ended December 31, 2017, 2016 and 2015

Revenue

Our revenue by segment for each of the years presented was as follows (in thousands):

	Year ended December 31,
	2017		% of Total		2016		% of Total		2015		% of Total
	(as restated)		(as restated)		(as restated)		(as restated)		(as revised)		(as revised)
North America	$	780,511	68.6	%	$	736,140	67.3	%	$	708,071	68.8	%
International	357,850		31.4		358,262		32.7		320,821		31.2
Net revenue from third parties	$	1,138,361	100.0	%	$	1,094,402	100.0	%	$	1,028,892	100.0	%

2017 compared to 2016. Our revenue increased by $44.0 million, or 4.0%, from $1,094.4 million in 2016 to $1,138.4 million in 2017.

North America

North America revenue increased by $44.4 million, or 6.0%, from $736.1 million in 2016 to $780.5 million in 2017. This increase was driven primarily by organic growth from new clients added during the last 12 to 24 months.

28

International 

International revenue decreased by $0.4 million, or 0.1%, from $358.3 million in 2016 to $357.9 million in 2017.

2016 compared to 2015. Our revenue increased by $65.5 million, or 6.4%, from $1,028.9 million in 2015 to $1,094.4 million in 2016.

North America

North America revenue increased by $28.0 million, or 4.0%, from $708.1 million in 2015 to $736.1 million in 2016. This increase is driven primarily by organic new account growth.

International

International revenue increased by $37.4 million, or 11.7%, from $320.8 million in 2015 to $358.3 million in 2016. This increase is driven primarily by organic new account growth and existing customer growth in the region.

Cost of goods sold

2017 compared to 2016. Our cost of goods sold increased by $31.1 million, or 3.7%, from $831.8 million in 2016 to $862.9 million in 2017. The increase is a result of higher revenue in 2017. Our cost of goods sold as a percentage of revenue was 75.8% in 2017 and 76.0% in 2016. 

2016 compared to 2015. Our cost of goods sold increased by $43.0 million, or 5.4%, from $788.9 million in 2015 to $831.8 million in 2016. The increase is a result of the revenue growth in 2016. Our cost of goods sold as a percentage of revenue was 76.0% in 2016 and 76.7% in 2015.

Gross Profit

2017 compared to 2016. Our gross profit as a percentage of revenue, which we refer to as gross margin, was 24.2% in 2017 and 24.0% in 2016. This increase was primarily driven by favorable product category and geographical mix in 2017 compared to 2016.

2016 compared to 2015. Our gross margin increased from 23.3% in 2015 to 24.0% in 2016. This increase was primarily driven by favorable product category and geographical mix in 2016 compared to 2015.

Selling, general and administrative expenses

2017 compared to 2016. Selling, general and administrative expenses increased by $17.7 million, or 8.5%, from $209.5 million in 2016 to $227.3 million in 2017. As a percentage of revenue, selling, general and administrative expenses increased from 19.1% in 2016 to 20.0% in 2017. The increase in selling, general and administrative expenses is primarily due to cost of production staff to manage new accounts and technology staff to develop our platform.

2016 compared to 2015. Selling, general and administrative expenses increased by $12.3 million, or 6.2%, from $197.2 million in 2015 to $209.5 million in 2016. As a percentage of revenue, selling, general and administrative expenses remained consistent at 19.2% to 19.1% in 2015 and 2016, respectively. The increase in selling, general and administrative expenses is primarily due to incremental sales commission and cost of production staff to manage new accounts.

Depreciation and amortization

2017 compared to 2016. Depreciation and amortization expense decreased by $4.5 million, or 25.3%, from $17.9 million in 2016 to $13.4 million in 2017. As a percentage of revenue, depreciation and amortization expense decreased from 1.6% in 2016 to 1.2% in 2017. The decrease in depreciation and amortization was primarily driven by the full year impact of the asset useful life reduction made in 2016.

In accordance with the Company’s fixed asset policy, the Company reviews the estimated useful lives of all its fixed assets, including software assets at least once a year or when there are indicators that a useful life has changed. The review during the fourth quarter of 2016 indicated that the estimated useful lives of certain proprietary software were longer than the previously estimated useful lives. As a result, effective October 1, 2016, the Company changed the estimated useful lives of a portion of its

29

software assets. The estimated useful lives of such assets were increased by an average of approximately 4.5 years. These assets had a net book value of $20.8 million as of October 1, 2016. The effect of this change in estimate resulted in a reduction of depreciation expense by $1.4 million, increase in net income by $0.8 million and increase in basic and diluted earnings per share by $0.015 for the year ended December 31, 2016.

2016 compared to 2015. Depreciation and amortization expense decreased by $0.4 million or 2.5%, from $17.5 million in 2015 to $17.9 million in 2016. As a percentage of revenue, depreciation and amortization expense decreased from 1.7% in 2015 to 1.6% in 2016. This decrease is primarily driven by customer list amortization which is amortized based on expected cash flows which generally declines over the life of the asset.

Change in fair value of contingent consideration

2017 compared to 2016. Expense from the change in fair value of contingent consideration decreased by $9.7 million from $10.4 million in 2016 to $0.7 million in 2017. The change in the fair value of the contingent liability during 2017 is driven by the final adjustment of the DB Studios liability during the first quarter of 2017 and the final adjustment of the EYELEVEL liability during the second and third quarters of 2017.

2016 compared to 2015. Expense from the change in fair value of contingent consideration increased by $10.7 million from income of $0.3 million in 2015 to expense of $10.4 million in 2016. The increase was primarily attributable to adjustments made to the contingent consideration liabilities related to the Company's EYELEVEL acquisition. For the year ended December 31, 2016, the Company's fair value adjustment to the contingent consideration liability included an adjustment of $10.7 million of expense to increase the liability relating to the EYELEVEL acquisition due to strong financial performance in recent periods and an improvement in forecasted results. This improved performance was primarily driven by significant expansion within EYELEVEL's existing customer base during 2016. There was also a decrease in the fair value of all other earn-out agreements of $0.3 million for the year ended December 31, 2016.

Goodwill impairment charge

During the year ended December 31, 2015 we recorded a goodwill impairment charge of $37.5 million. No impairment charges were taken for the years ended December 31, 2017 and 2016.

2015 Goodwill Impairment Charge

We performed our annual impairment test as of October 1, 2015.In the first step of the impairment test, we concluded that the carrying amount of the EMEA reporting unit exceeded its fair value, requiring us to perform the second step of the impairment test to measure the amount of impairment loss, if any. The fair values of the North America and Latin America reporting units exceeded their carrying values and the second step was not necessary.

Based upon fair value estimates of long-lived assets and discounted cash flows of the EMEA reporting unit, we compared the implied fair value of the goodwill in this reporting unit with the carrying value. The test resulted in a $37.5 million non-cash, goodwill impairment charge which was recognized during the fourth quarter of 2015. No tax benefit was recognized on the goodwill impairment. This charge had no impact on our cash flows or compliance with debt covenants.

Intangible asset impairment charges

The Company did not record any intangible asset impairment charges in 2017.

In the fourth quarter of 2016, we recognized a $0.1 million non-cash, intangible asset impairment charge related to a trade name acquired in a prior year business combination within our International segment.

In the fourth quarter of 2015, we recognized a $0.2 million non-cash, intangible asset impairment charge related to certain customer lists acquired in prior year business combinations within the EMEA segment, now part of the international reportable segment. Due to the loss of specific customers included in the lists, the undiscounted projected cash flows from those customers did not exceed the recorded book value of the customer lists as of December 31, 2015.

Restructuring charges

The Company did not record any restructuring charges in December 31, 2017.

30

During the year ended December 31, 2016, the Company recognized $5.6 million in restructuring charges related to the global realignment plan described below, of which $0.5 million, $3.9 million and $1.2 million related to the North America, International and Other segments, respectively.

 During the fourth quarter of 2015, management approved a global realignment plan that allowed the Company to more efficiently meet client needs across its international platform. Through improved integration of global resources, the plan created back office and other efficiencies and allowed for the elimination of approximately 100 positions deemed unnecessary. In connection with these actions, the Company incurred total pre-tax cash restructuring charges of $6.7 million between 2015 and 2016.

Income (loss) from operations

2017 compared to 2016. Income from operations increased by $15.1 million from $19.0 million in 2016 to $34.1 million in 2017. This increase was primarily attributable to an increase in gross profit and a decrease in expense from the change in fair value of contingent consideration and restructuring charges, which are discussed above. These changes partially offset the $17.8 million increase in selling, general and administrative expenses.

2016 compared to 2015. Income (loss) from operations increased by $32.2 million, from $(13.2) million in 2015 to $19.0 million in 2016. This increase was primarily attributable to an increase in gross profit, as well as the goodwill impairment charge recognized in 2015, all of which are discussed above. These changes more than offset the $12.3 million increase in selling, general and administrative expenses.

Other income and expense

2017 compared to 2016. Other expense increased by $2.2 million, from $4.2 million in 2016 to $6.4 million in 2017. This increase was primarily attributable to foreign exchange losses in our International operations.

2016 compared to 2015. Other expense decreased by $3.5 million, from $7.7 million in 2015 to $4.2 million in 2016. This decrease was primarily attributable to the $1.5 million remeasurement of Company's net assets in Venezuela in 2015.

Provision for income taxes  

2017 compared to 2016. Income tax expense increased by $0.5 million from tax expense of $10.8 million in 2016 to tax expense of $11.3 million in 2017. Our effective income tax rate was 40.7% and 73.3% in 2017 and 2016, respectively. Our effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, valuation allowances, discrete tax events and foreign taxes that are different than the U.S. federal statutory rate. In addition, the effective tax rate can be impacted each period by discrete factors and events.

The effective tax rate for 2016 was affected by the fair value changes to contingent consideration and the goodwill impairment charge. Portions of the total gain recognized from fair value changes to contingent consideration relate to non-taxable acquisitions for which deferred taxes are not recognized, consistent with the treatment of goodwill and intangible assets for those acquisitions under U.S. GAAP. For the year ended and December 31, 2016, $10.4 million was recognized as expense from changes to contingent consideration which did not result in recognition of a deferred tax liability, therefore, reducing the effective tax rate for these periods.

Additionally, during the fourth quarter of 2016, we recognized a $1.2 million non-cash charge to record valuation allowances on deferred tax assets of certain foreign operations affected by the global realignment which have net operating loss carryforwards and other deferred tax assets for which it is considered more likely than not that those assets will not be realized.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. As of the date of enactment, we have adjusted our deferred tax assets and liabilities for our new statutory rate which resulted in a $5.1 million credit to our income tax provision for the year ended December 31, 2017. In addition, we have estimated and recorded a provisional expense of $5.3 million for transition tax related to our foreign operations.

We continue to evaluate the impacts of the Act and will consider additional guidance from the U.S. Treasury Department, IRS or other standard-setting bodies. Further adjustments, if any, will be recorded by us during the measurement period in 2018 as permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. 

31

We operate under a grant of income tax exemption in Puerto Rico, that became effective for certain operations occurring during the period ending December 31, 2017 and should remain in effect for 20 years as long as specific requirements are satisfied. The impact of this income tax exemption grant decreased foreign taxes by $0.4 million for 2017. The benefit of the tax exemption on diluted earnings per share was less than $0.01.

2016 compared to 2015. Income tax expense decreased by $0.7 million from tax expense of $11.5 million in 2015 to tax expense of $10.8 million in 2016. Our effective income tax rate was 73.3% and (55.0)% in 2016 and 2015, respectively. Our effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, valuation allowances, discrete tax events and foreign taxes that are different than the U.S. federal statutory rate. In addition, the effective tax rate can be impacted each period by discrete factors and events.

The effective tax rates for 2016 and 2015 were affected by the fair value changes to contingent consideration and the goodwill impairment charge. Portions of the total gain recognized from fair value changes to contingent consideration relate to non-taxable acquisitions for which deferred taxes are not recognized, consistent with the treatment of goodwill and intangible assets for those acquisitions under U.S. GAAP. For the years ended December 31, 2016 and 2015$10.4 million and $(0.3) million, respectively, was recognized as expense (income) from changes to contingent consideration which did not result in recognition of a deferred tax liability, therefore, reducing the effective tax rate for these periods. This decrease was offset by a $37.5 million goodwill impairment charge in 2015 since the goodwill was not deductible and the impairment does not result in a tax benefit.

Additionally, during the fourth quarter of 2015, we recognized a $4.7 million non-cash charge to record valuation allowance on deferred tax assets of certain foreign operations affected by the global realignment which have net operating loss carryforwards and other deferred tax assets for which it is considered more likely than not that those assets will not be realized. During 2016 we recognized an additional $1.2 million non-cash charge related to changes in the valuation allowances against those net operating loss carryforwards affected by the realignment. Excluding the impact of these and other discrete factors and events, our effective tax rate was 31.2% and 37.0% during 2016 and 2015, respectively.

Net income (loss)

2017 compared to 2016. Net income increased by $12.5 million from $3.9 million in 2016 to $16.4 million in 2017. Net income as a percentage of revenue was 1.4% and 0.4% in 2017 and 2016, respectively.

2016 compared to 2015. Net income (loss) increased by $36.3 million from $(32.4) million in 2015 to $3.9 million in 2016. Net income (loss) as a percentage of revenue was 0.4% and (3.1)% in 2016 and 2015, respectively.

Diluted Earnings (Loss) Per Share

	Year ended December 31,
	2017		2016		2015
(in thousands, except per share data)	(as restated)		(as restated)		(as revised)
Net income (loss)	$	16,430	$	3,949	$	(32,389	)
Denominator for dilutive earnings per share	54,944		54,460		52,791
Diluted earnings (loss) per share	$	0.30	$	0.07	$	(0.61	)

2017 compared to 2016. Diluted earnings per share increased by $0.23 from diluted earnings per share of $0.07 in 2016 to diluted earnings per share of $0.30 in 2017. This increase is primarily due to the increase in net income discussed above.

2016 compared to 2015. Diluted earnings (loss) per share increased by $0.68 from a diluted loss of $(0.61) per share in 2015 to diluted earnings per share of $0.07 in 2016. This increase is primarily due to the increase in net income discussed above.

32

Adjusted EBITDA

Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and other amounts itemized in the reconciliation table below, is considered a non-GAAP financial measure under SEC regulations. Net income (loss) is the most directly comparable financial measure calculated in accordance with U.S. GAAP. We present this measure as supplemental information to help our investors better understand trends in our business over time. Our management team uses Adjusted EBITDA to evaluate the performance of our business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of our overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition we use may not be comparable to similarly titled measures reported by other companies. Our Adjusted EBITDA by segment for each of the years presented was as follows:

	Year ended December 31,
	2017			% of Total		2016			% of Total		2015			% of Total
(dollars in thousands)	(as restated)			(as restated)		(as restated)			(as restated)		(as revised)			(as revised)
North America	$	74,230		128.2	%	$	68,435		116.8	%	$	63,436		125.2	%
International	19,520			33.7		21,570			36.8		15,124			29.8
Other(1)	(35,867		)	(61.9	)	(31,392		)	(53.6	)	(27,881		)	(55.0	)
Adjusted EBITDA	$	57,883		100.0	%	$	58,612		100.0	%	$	50,679		100.0	%

(1) “Other” consists of intersegment eliminations, shared service activities and corporate expenses which are not allocated to the operating segments as management does not consider them in evaluating segment performance.

2017 compared to 2016. Adjusted EBITDA decreased by $(0.7) million, or (1.2)%, from $58.6 million in 2016 to $57.9 million in 2017. North America Adjusted EBITDA increased by $5.8 million, or 8.5%, from $68.4 million in 2016 to $74.2 million in 2017 due to increased revenue and gross profit from organic growth of new customers. International Adjusted EBITDA decreased by $2.1 million, or 9.5%, from $21.6 million in 2016 to $19.5 million in 2017 primarily due to cost of production staffing to manage new accounts. Other Adjusted EBITDA decreased by $4.5 million or 14.3%, from expense of $31.4 million in 2016 to expense of $35.9 million in 2017 driven by platform investments, mainly staffing costs.

2016 compared to 2015. Adjusted EBITDA increased by $7.9 million or 15.7%, from $50.7 million in 2015 to $58.6 million in 2016. North America Adjusted EBITDA increased by $5.0 million or 7.9%, from $63.4 million in 2015 to $68.4 million in 2016 due to increased gross profit from organic new account growth. International Adjusted EBITDA increased by $6.4 million or 42.6%, from $15.1 million in 2015 to $21.6 million in 2016 due to new account growth and Global Realignment related cost savings. Other Adjusted EBITDA decreased by $3.5 million or 12.6%, from expense of $27.9 million in 2015 to expense of $31.4 million in 2016.

33

The table below provides a reconciliation of Adjusted EBITDA to net income (loss) for each of the years presented (in thousands):

	Year ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Net income (loss)	$	16,430	$	3,949	$	(32,389	)
Income tax expense	11,288		10,834		11,498
Total other expense	6,420		4,239		7,678
Depreciation and amortization	13,390		17,916		17,472
Stock-based compensation expense	6,820		5,572		5,873
Change in fair value of contingent consideration	677		10,417		(270		)
Goodwill impairment charge	—		—		37,539
Intangible asset impairment charges	—		70		202
Restructuring and other charges	—		5,615		1,053
Business development realignment	715		—		—
Professional fees related to ASC 606 implementation	829		—		—
CEO search costs	454		—		—
Czech currency impact on procurement margin	860		—		—
Secured asset reserve(1)	—		—		2,023
Adjusted EBITDA	$	57,883	$	58,612	$	50,679

(1) The Company accrued a reserve of $2.0 million in 2015 on inventory in which it holds a security interest. The inventory was procured for a former client.

34

Adjusted Diluted Earnings Per Share

Adjusted diluted earnings per share, which represents net income (loss), with the addition of the change in the fair value of contingent consideration liabilities, impairment charges and other amounts itemized in the reconciliation table below, divided by the weighted average shares outstanding plus share equivalents that would arise from the exercise of stock options and restricted stock and other contingently issuable shares, is considered a non-U.S.GAAP financial measure under SEC regulations. Diluted earnings (loss) per share is the most directly comparable financial measure calculated in accordance with U.S. GAAP. We present this measure as supplemental information to help our investors better understand trends in our business over time. Our management team uses adjusted diluted earnings per share to evaluate the performance of our business. Adjusted diluted earnings per share is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of our overall financial performance and liquidity. Moreover, the adjusted diluted earnings per share definition we use may not be comparable to similarly titled measures reported by other companies. Our adjusted diluted earnings per share for each of the years presented was as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Net income (loss)	$	16,430	$	3,949	$	(32,389	)
Change in fair value of contingent consideration, net of tax	677		10,417		(282		)
Goodwill impairment charge, net of tax	—		—		37,539
Intangible asset impairment charges, net of tax	—		56		153
Restructuring and other charges, net of tax	—		4,873		873
Realignment-related income tax charges	—		1,179		4,685
Czech exit from exchange rate commitment, net of tax	294		—		—
Business development realignment, net of tax	875		—		—
Professional fees related to ASC 606 implementation, net of tax	528		—		—
CEO search costs, net of tax	282		—		—
Czech currency impact on procurement margin, net of tax	697		—		—
Accelerated depreciation of internal use software, net of tax	246		—		—
Secured asset reserve, net of tax	—		—		1,239
Venezuela remeasurement charges	—		—		1,521
Adjusted net income	20,029		20,474		13,339
Weighted average shares outstanding, diluted	54,944		54,460		53,515
Non-GAAP Diluted Earnings Per Share	$	0.36	$	0.38	$	0.25

35

Quarterly Results of Operations

The following table presents unaudited statement of income data for our most recent eight fiscal quarters. You should read the following table in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K/A. The results of operations of any quarter are not necessarily indicative of the results that may be expected for any future period.

	Three months ended
	Mar 30, 2016			June 30, 2016			Sept 30, 2016		Dec 31, 2016		Mar 31, 2017		June 30, 2017		Sept 30, 2017		Dec 31, 2017
(in thousands)	(as restated)			(as restated)			(as restated)		(as restated)		(as restated)		(as restated)		(as restated)		(as restated)
Revenue	$	270,461		$	272,212		$	276,002	$	275,727	$	264,405	$	280,066	$	288,523	$	305,367
Gross profit	61,526			65,980			66,581		68,477		64,704		70,046		71,921		68,787
Net income (loss)	(3,136		)	(1,905		)	4,225		4,765		5,678		4,374		7,116		(738		)
Earnings (loss) per share:
Basic	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09	$	0.11	$	0.08	$	0.13	$	(0.01	)
Diluted	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09	$	0.10	$	0.08	$	0.13	$	(0.01	)

Impact of Inflation

Since January 1, 2010, Venezuela has been designated as a highly inflationary economy under U.S. GAAP. In accordance with U.S. GAAP, local subsidiaries in highly inflationary economies are required to use the U.S. dollar as their functional currency and remeasure the monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion of a currency for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement are recognized currently in income.

Prior to December 31, 2015, the Company translated the net assets and transactions of its Venezuelan subsidiary using the official exchange rate of 6.3 bolivars for each U.S. Dollar. In February 2015, the Venezuelan government introduced a new currency exchange system referred to as the SIMADI which is intended to be a market-driven rate and is more widely available than the official rate or the auction-based exchange system known as the SICAD. Based on the Company’s facts and circumstances as of December 31, 2015, the SIMADI rate was determined to be the most appropriate rate for reporting the operations of the Company’s Venezuelan subsidiary.

As of December 31, 2015, the SIMADI rate was approximately 198 bolivars for each U.S. Dollar. The remeasurement of the Company’s net assets from the official rate of 6.3 to the SIMADI rate resulted in a foreign exchange loss of approximately $1.5 million during the fourth quarter of 2015. This loss is included in other expense on the consolidated statement of operations. The combined value of the net monetary assets of our Venezuelan subsidiary is less than $0.1 million at December 31, 2015. Further government regulation or changes in exchange rates could result in additional impairments of these assets.

Inflation did not have a material impact on our operations in 2017 or 2016.

Liquidity and Capital Resources

We entered into a Credit Agreement, dated as of August 2, 2010, subsequently amended most recently as of February 3, 2017, among us, the lenders party thereto and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”). The Credit Agreement includes a revolving commitment amount of $175 million in the aggregate with a maturity date of September 25, 2019 and provides us the right to increase the aggregate commitment amount by an additional $50 million. Outstanding borrowings under the revolving credit facility are guaranteed by our material domestic subsidiaries. Our obligations under the Credit Agreement and such domestic subsidiaries’ guaranty obligations are secured by substantially all of our respective assets. The ranges of applicable rates charged for interest on outstanding loans and letters of credit are 125-250 basis point spread for letter of credit fees and loans based on the Eurodollar rate and 25-150 basis point spread for loans based on the base rate. We are in compliance with all covenants contained in the Credit Agreement as of December 31, 2017.

At December 31, 2017, we had $30.6 million of cash and cash equivalents.

36

Operating Activities. Cash provided by operating activities primarily consists of net income adjusted for certain non-cash items, including depreciation and amortization, share based compensation, changes in the fair value of contingent consideration and the effect of changes in working capital and other activities. Cash provided by operating activities in 2017 was $16.1 million and primarily consisted of $25.6 million of non-cash items and $16.4 million of net income during the year, offset by $26.0 million used to fund working capital. The working capital changes consisted of an increase in accounts receivable of $41.9 million, an increase in prepaid expenses and other assets of $13.5 million, and an increase in inventories of $4.2 million, partially offset by an increase in accounts payable of $18.2 million, and an increase in accrued expenses and other liabilities of $15.5 million.

Cash provided by operating activities in 2016 was $10.5 million and primarily consisted of $36.6 million of non-cash items and $3.9 million of net income during the year, offset by $30.0 million used to fund working capital. The working capital changes consisted of a decrease in accounts payable of $38.4 million, partially offset by an increase in accounts receivable of $2.7 million, an increase in prepaid expense and other assets of $8.2 million, a decrease in inventories of $6.4 million, and an increase in accrued expenses and other liabilities of $12.9 million.

Cash provided by operating activities in 2015 was $43.4 million and primarily consisted of $4.3 million provided by working capital changes and $71.5 million of non-cash items, offset by net loss of $32.4 million during the year. The most significant impact on working capital changes consisted of an increase in accounts payable of $25.1 million and an increase in accrued expenses and other liabilities of $3.6 million, partially offset by an increase in accounts receivable of $10.6 million, an increase in prepaid expenses and other assets of $4.1 million, and an increase in inventory of $9.7 million.

Investing Activities. In 2017, cash used in investing activities of $12.5 million was attributable to capital expenditures, primarily consisting of software development.

In 2016, cash used in investing activities of $13.3 million was attributable to capital expenditures, primarily consisting of software development.

In 2015, cash used in investing activities of $15.0 million was attributable to capital expenditures, primarily consisting of software development.

Financing Activities. In 2017, cash used in financing activities of $4.9 million was primarily attributable to $15.3 million of payments of contingent consideration, $10.9 million to acquire treasury stock, offset by $20.7 million of net borrowings under our revolving credit facility.

In 2016, cash provided financing activities of $3.6 million was primarily attributable to $8.7 million of borrowings under our revolving credit facility and $4.0 million of excess tax benefits from exercise of stock awards, offset by $11.4 million of payments of contingent consideration.

In 2015, cash provided by financing activities of $18.4 million was primarily attributable to $8.0 million of payments of contingent consideration, $5.3 million of net borrowings under our revolving credit facility, and $4.9 million to acquire treasury stock.

We will continue to utilize cash, in part, to invest in our innovative technology platform, fund acquisitions of or make strategic investments in complementary businesses and expand our sales force. Although we can provide no assurances, we believe that our available cash and cash equivalents and the $32.4 million available under our Credit Agreement will be sufficient to meet our working capital and operating expenditure requirements for the next 12 months. We may find it necessary to obtain additional equity or debt financing in the future.

We earn a significant amount of our operating income outside the United States, which is deemed to be permanently reinvested in foreign jurisdictions. We do not currently foresee a need to repatriate funds; however, should we require more capital in the United States than is generated by our operations locally or through debt or equity issuances, we could elect to repatriate funds held in foreign jurisdictions. Included in our cash and cash equivalents are amounts held by foreign subsidiaries. We had $28.6 million and $28.1 million foreign cash and cash equivalents as of December 31, 2017 and 2016, respectively, which are generally denominated in the local currency where the funds are held.

37

Contractual Obligations

As of December 31, 2017, we had the following contractual obligations:

	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in thousands)
Accounts payable (as restated)	$	141,164	$	141,164	$	—	$	—	$	—
Operating lease obligations	23,215		6,942		9,633		4,560		2,080
Revolving credit facility	128,398		—		128,398		—		—
Total	$	292,777	$	148,106	$	138,031	$	4,560	$	2,080

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Commodity Risk

We are dependent upon the availability of paper and paper prices represent a substantial portion of the cost of our products. The supply and price of paper depend on a variety of factors over which we have no control, including environmental and conservation regulations, natural disasters and weather. We believe a 10% increase in the price of paper would not have a significant effect on the Company’s consolidated statements of income or cash flows, as these costs are generally passed through to our clients.

Interest Rate Risk

We have exposure to changes in interest rates on our revolving credit facility. Interest is payable at the adjusted LIBOR rate or the alternate base rate. Assuming our $175.0 million revolving credit facility was fully drawn, a 1.0% increase in the interest rate would increase our annual interest expense by $1.75 million.

Our interest income is sensitive to changes in the general level of U.S. interest rates, in particular because all of our investments are considered cash equivalents.  The average duration of all of our investments as of December 31, 2017, was less than one year. Due to the short-term nature of our investments, we believe that there is no material risk exposure.

Foreign Currency Risk

We transact business in various foreign currencies other than the U.S. dollar, principally the Euro, British pound sterling, Czech Koruna, Peruvian Nuevo Sol, Colombian peso, Brazilian real, Mexican peso and Chilean peso, which exposes us to foreign currency risk. For the year ended December 31, 2017, we derived approximately 31.4% of our revenue from international customers and we expect the percentage of revenue derived from outside the United States to increase in future periods as we continue to expand globally. Revenue and related expenses generated from our international operations are denominated in the functional currencies of the corresponding country. The functional currency of our subsidiaries that either operate or support these markets is generally the same as the corresponding local currency. The results of operations of and certain of our intercompany balances associated with, our international operations are exposed to foreign exchange rate fluctuations. Changes in exchange rates could negatively affect our revenue and other operating results as expressed in U.S. dollars. We may record significant gains or losses on the re-measurement of intercompany balances. Foreign exchange gains and losses recorded to date have been immaterial to our financial results. At this time we do not, but in the future we may enter into derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk. It is difficult to predict the impact hedging activities would have on our results of operations.

38

Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS AND

FINANCIAL STATEMENT SCHEDULE

INNERWORKINGS, INC.:
Report of Independent Registered Public Accounting Firm	40
Consolidated Statements of Operations	41
Consolidated Statements of Comprehensive Income (Loss)	42
Consolidated Balance Sheets	43
Consolidated Statements of Stockholders’ Equity	44
Consolidated Statements of Cash Flows	45
Notes to Consolidated Financial Statements	46

39

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors ofInnerWorkings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of InnerWorkings, Inc.’s and subsidiaries (the Company) as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2017, the related notes and the financial statement schedule listed in the Index at Item 15(a)2 (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2017 and 2016, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated July 27, 2018 expressed an adverse opinion thereon.

Restatement of 2017 and 2016 Financial Statements

As discussed in Note 20 to the consolidated financial statements, the 2017 and 2016 consolidated financial statements have been restated to correct certain misstatements. Our opinion is not modified with respect to this matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2005.

Chicago, Illinois

July 27, 2018

40

InnerWorkings, Inc. and subsidiaries

Consolidated Statements of Operations

(In thousands, except per share data)

	Year Ended December 31,
	2017			2016			2015
	(as restated)			(as restated)			(as revised)
Revenue	$	1,138,361		$	1,094,402		$	1,028,892
Cost of goods sold	862,903			831,838			788,862
Gross profit	275,458			262,564			240,030
Operating expenses:
Selling, general and administrative expenses	227,253			209,524			197,247
Depreciation and amortization	13,390			17,916			17,472
Change in fair value of contingent consideration	677			10,417			(270		)
Goodwill impairment charge	—			—			37,539
Intangible asset impairment charges	—			70			202
Restructuring charges	—			5,615			1,053
Income (loss) from operations	34,138			19,022			(13,213		)
Other income (expense):
Interest income	97			86			69
Interest expense	(4,729		)	(4,171		)	(4,612		)
Other, net	(1,788		)	(154		)	(3,135		)
Total other expense	(6,420		)	(4,239		)	(7,678		)
Income (loss) before taxes	27,718			14,783			(20,891		)
Income tax expense	11,288			10,834			11,498
Net income (loss)	$	16,430		$	3,949		$	(32,389	)
Basic earnings (loss) per share	$	0.31		$	0.07		$	(0.61	)
Diluted earnings (loss) per share	$	0.30		$	0.07		$	(0.61	)

See accompanying notes to the consolidated financial statements.

41

InnerWorkings, Inc. and subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(In thousands) 

	Year Ended December 31,
	2017		2016			2015
	(as restated)		(as restated)			(as revised)
Net income (loss)	$	16,430	$	3,949		$	(32,389	)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	1,732		(7,168		)	(8,592		)
Other comprehensive income (loss), before tax	1,732		(7,168		)	(8,592		)
Income tax expense (benefit) related to components of other comprehensive income (loss)	12		(21		)	(341		)
Other comprehensive income (loss), net of tax	1,720		(7,147		)	(8,251		)
Comprehensive income (loss)	$	18,150	$	(3,198	)	$	(40,640	)

See accompanying notes to the consolidated financial statements.

42

InnerWorkings, Inc. and subsidiaries 

Consolidated Balance Sheets

(In thousands, except per share data)

	December 31,
	2017			2016
	(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	30,562		$	30,924
Accounts receivable, net of allowance for doubtful accounts of $3,534 and $2,622, respectively	205,386			182,464
Unbilled revenue	50,016			31,516
Inventories	40,694			36,448
Prepaid expenses	18,565			18,459
Other current assets	37,865			24,597
Total current assets	383,088			324,408
Property and equipment, net	36,714			32,656
Intangibles and other assets:
Goodwill	199,946			202,700
Intangible assets, net	27,563			31,538
Deferred income taxes	691			1,031
Other non-current assets	1,636			1,654
Total intangibles and other assets	229,836			236,923
Total assets	$	649,638		$	593,987
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	141,164		$	123,012
Current portion of contingent consideration	—			19,283
Other current liabilities	24,078			22,576
Deferred revenue	17,620			16,402
Accrued expenses	34,391			29,755
Total current liabilities	217,253			211,028
Revolving credit facility	128,398			107,468
Deferred income taxes	12,043			10,766
Other long-term liabilities	7,399			2,564
Total liabilities	365,093			331,826
Commitments and contingencies (See Note 9)
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000 and 200,000 shares authorized, 64,075 and 63,391 shares issued, 54,055 and 54,088 shares outstanding, respectively	6			6
Additional paid-in capital	235,199			224,480
Treasury stock at cost, 10,020 and 9,303 shares, respectively	(55,873		)	(49,458		)
Accumulated other comprehensive loss	(19,229		)	(20,949		)
Retained earnings	124,442			108,082
Total stockholders' equity	284,545			262,161
Total liabilities and stockholders' equity	$	649,638		$	593,987

See accompanying notes to the consolidated financial statements.

43

InnerWorkings, Inc. and subsidiaries

Consolidated Statements of Stockholders' Equity

(In thousands)

	Common Stock			Treasury Stock					Additional Paid-in-Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings			Total
	Shares	Amount		Shares		Amount
Balance at December 31, 2014 (as revised)	61,852	$	6	9,021		$	(49,996	)	$	207,429		$	(5,551	)	$	138,373		$	290,260
Net loss															(32,389		)	(32,389		)
Total other comprehensive loss												(8,251		)				(8,251		)
Comprehensive loss																		(40,640		)
Issuance of common stock upon exercise of stock awards	793	—							675									675
Issuance of common stock and treasury shares as consideration for acquisition				(238	)	2,686									(1,115		)	1,571
Acquisition of treasury shares				764		(4,897		)										(4,897		)
Excess tax benefit derived from stock award exercises									(411		)							(411		)
Stock-based compensation expense									5,873									5,873
Balance at December 31, 2015 (as revised)	62,645	6		9,547		(52,207		)	213,566			(13,802		)	104,869			252,432
Net income															3,949			3,949
Total other comprehensive loss												(7,147		)				(7,147		)
Comprehensive loss																		(3,198		)
Issuance of common stock upon exercise of stock awards	746	—							1,770									1,770
Issuance of common stock and treasury shares as consideration for acquisition				(244	)	2,749									(737		)	2,012
Excess tax benefit derived from stock award exercises									3,572									3,572
Stock-based compensation expense									5,572									5,572
Balance at December 31, 2016 (as restated)	63,391	6		9,303		(49,458		)	224,480			(20,949		)	108,082			262,161
Net income															16,430			16,430
Total other comprehensive income												1,720						1,720
Comprehensive income																		18,150
Issuance of common stock upon exercise of stock awards	648	—							1,421									1,421
Issuance of common stock and treasury shares as consideration for acquisition	36	—		(405	)	4,561			385						(269		)	4,678
Acquisition of treasury shares				1,122		(10,976		)										(10,976		)
Stock-based compensation expense									6,820									6,820
Cumulative effect of change related to adoption of ASU 2016-09									2,093						198			2,291
Balance at December 31, 2017 (as restated)	64,075	$	6	10,020		$	(55,873	)	$	235,199		$	(19,229	)	$	124,442		$	284,545

See accompanying notes to the consolidated financial statements.

44

InnerWorkings, Inc. and subsidiaries 

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2017			2016			2015
	(as restated)			(as restated)			(as revised)
Cash flows from operating activities
Net income (loss)	$	16,430		$	3,949		$	(32,389	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	13,390			17,916			17,472
Stock-based compensation expense	6,820			5,572			5,873
Deferred income taxes	4,072			4,226			5,879
Change in fair value of contingent consideration liability	677			10,417			(270		)
Goodwill impairment charge	—			—			37,539
Intangible asset impairment charges	—			70			202
Bad debt provision	454			2,171			1,685
Secured asset reserve	—			—			2,023
Venezuela remeasurement charges	—			—			890
Excess tax benefit from exercise of stock awards	—			(4,030		)	—
Other operating activities	210			210			210
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(41,877		)	(2,651		)	(10,580		)
Inventories	(4,245		)	6,355			(9,676		)
Prepaid expenses and other assets	(13,547		)	(8,206		)	(4,140		)
Change in liabilities, net of acquisitions:
Accounts payable	18,152			(38,408		)	25,102
Accrued expenses and other liabilities	15,520			12,933			3,582
Net cash provided by operating activities	16,056			10,525			43,402
Cash flows from investing activities
Purchases of property and equipment	(12,483		)	(13,319		)	(15,034		)
Net cash used in investing activities	(12,483		)	(13,319		)	(15,034		)
Cash flows from financing activities
Net borrowing (repayments) of revolving credit facility	(867		)	8,739			(5,281		)
Net short-term secured borrowings (repayments)	20,709			405			(799		)
Repurchases of common stock	(10,885		)	—			(4,897		)
Payments of contingent consideration	(15,345		)	(11,374		)	(8,010		)
Proceeds from exercise of stock options	2,663			2,636			1,195
Excess tax benefit from exercise of stock awards	—			4,030			—
Other financing activities	(1,156		)	(866		)	(594		)
Net cash (used in) provided by financing activities	(4,881		)	3,570			(18,386		)
Effect of exchange rate changes on cash and cash equivalents	948			(607		)	(1,805		)
(Decrease) increase in cash and cash equivalents	(362		)	169			8,177
Cash and cash equivalents, beginning of period	30,924			30,755			22,578
Cash and cash equivalents, end of period	$	30,562		$	30,924		$	30,755

See accompanying notes to the consolidated financial statements.

45

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

1. Description of the Business

InnerWorkings, Inc. (together with its subsidiaries, “the Company”) was incorporated in the state of Delaware on January 3, 2006. The Company is a leading global marketing execution firm for the world's most marketing intensive companies, including those companies in the Fortune 1000, across a wide range of industries. As a comprehensive outsourced enterprise solution, the Company leverages proprietary technology, an extensive supplier network and deep domain expertise to streamline the creation, production and distribution of marketing and promotional materials, signage and displays, retail experiences, events and promotions and packaging across every major market worldwide. The items the Company sources are generally procured through the marketing supply chain and are referred to collectively as marketing materials. The Company’s technology and database of information is designed to capitalize on excess manufacturing capacity and other inefficiencies in the traditional marketing and print supply chain to obtain favorable pricing and to deliver high-quality products and services.

The Company is organized and managed as two business segments, North America and International, and is viewed as two operating segments by the chief operating decision maker for purposes of resource allocation and assessing performance. See Note 18 for further information about the Company’s reportable segments.

2.Summary of Significant Accounting Policies

Restatement and Revision of Prior Period Financial Statements

The Company has restated herein its audited consolidated financial statements for the years ended December 31, 2017 and 2016 and all interim periods therein and has revised herein its audited consolidated financial statements for the year ended December 31, 2015. The restated financial statements correct the Company’s accounting for recording a portion of costs of goods sold in the incorrect periods and have no material impact on our cash flow or liquidity. The restated and revised financial statements also include adjustments for certain immaterial accounting errors related to all periods covered in the financial statements, which are immaterial individually and in the aggregate. See Notes 20 and 21 for additional information.

The corrections contained in the financial statements, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.    

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of InnerWorkings, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Preparation of Financial Statements and Use of Estimates

The preparation of the consolidated financial statements is in conformity with accounting principles generally accepted in the United States ("GAAP"). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to product returns, allowance for doubtful accounts, inventories and inventory valuation, valuation and impairments of goodwill and long-lived assets, income taxes, accrued bonus, contingencies, stock-based compensation and litigation costs. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates.

Foreign Currency Translation

The Company determines the functional currency for its parent company and each of its subsidiaries by reviewing the currencies in which their respective operating activities occur. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains and losses arising from activities in other than the applicable functional currency are calculated using average exchange rates for the applicable period and reported in net income as a non-operating item in each period. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate.

46

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

The net realized gains (losses) on foreign currency transactions was $(1.4) million, $0.6 million and $(3.3) million for the years ended December 31, 2017, 2016 and 2015, respectively. As further discussed in Note 2, the net realized losses on foreign currency transactions for the year ended December 31, 2015 includes a charge of $1.5 million for the remeasurement of the Company's net assets in Venezuela.

Revenue Recognition

The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which is typically met upon shipment or delivery of our products to customers: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders and (iv) collectability is reasonably assured. Unbilled revenue represents shipments or deliveries that have been made to customers for which the related account receivable has not yet been invoiced.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition – Principal Agent Considerations, the Company generally reports revenue on a gross basis because the Company is the primary obligor in its arrangements to procure marketing materials and other products for its customers. Under these arrangements, the Company is responsible for the fulfillment, including the acceptability, of the printed materials and other products. In addition, the Company (i) determines which suppliers are included in its network, (ii) has discretion to select from among the suppliers within its network, (iii) is obligated to pay its suppliers regardless of whether it is paid by its customers and (iv) has reasonable latitude to establish exchange price. In some transactions, the Company also has general inventory risk and is involved in the determination of the nature or characteristics of the printed materials and products. When the Company is not the primary obligor, revenues are reported on a net basis.

The Company recognizes revenue for creative, design, installation, warehousing and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. When provided on a stand-alone basis, the Company recognizes revenue for these services upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date.

The Company records taxes collected from customers and remitted to governmental authorities on a net basis.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are uncollateralized customer obligations due under normal trade terms. Payment terms with customers are generally 30 to 90 days from the invoice date. Accounts receivable are stated at the amount billed to the customer, less an estimate for potential bad debts. Interest is not generally accrued on outstanding balances.

The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company estimates the collectability of its accounts receivable based on a combination of factors including, but not limited to, customer credit ratings and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings or substantial downgrading of credit ratings), the Company provides allowances for bad debts against amounts due to reduce the net recognized receivable to the amount it reasonably believes will be collected. Aged receivables are reviewed on a regular basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Net realizable value is based upon an estimated average selling price reduced by estimated costs of disposal. Inventories primarily consist of purchased finished goods. Finished goods inventory includes consigned inventory held on behalf of customers as well as inventory held at third-party fulfillment centers and subcontractors.

47

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows:

Computer equipment	3 years
Software, including internal-use software	1 to 6 years
Office equipment	5 years
Furniture and fixtures	7 years

Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. 

Internal-Use Software

In accordance with ASC 350-40, Intangibles—Goodwill and Other, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized internal-use software costs are depreciated over the expected economic useful life of three to six years using the straight-line method. Capitalized internal-use software asset depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $5.4 million, $9.2 million and $8.6 million, respectively and is included in total depreciation expense. At December 31, 2017 and 2016, the net book value of internal-use software was $29.7 million and $26.0 million, respectively.

Effective October 1, 2016, the Company changed the estimated useful lives of some of its software assets. The estimated useful lives of such assets were increased by an average of approximately 4.5 years, see note 7.

Goodwill

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"), goodwill is not amortized, but instead is tested for impairment annually or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of the first day of its fourth fiscal quarter of each year.

Under ASC 350, an entity is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the quantitative test is required, in the first step, the fair value for each reporting unit is compared to its book value including goodwill. In the case that the fair value is less than the book value, a second step is performed which compares the implied fair value of goodwill to the book value of goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair values of the identifiable assets and liabilities. If the implied fair value of the goodwill is less than the book value of the goodwill, the difference is recognized as an impairment. 

At October 1, 2017, the Company elected to perform a qualitative assessment of the likelihood that goodwill is impaired. Based on the assessment, no impairment was identified as of October 1, 2017. The Company does not believe that goodwill is impaired as of December 31, 2017.

Other Intangible Assets

In accordance with ASC 350, Intangibles—Goodwill and Other, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. The Company’s intangible assets consist of customer lists, non-competition agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of approximately fourteen years, are being amortized using the

48

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

economic life method. The Company’s non-competition agreements, trade names and patents are being amortized on the straight-line basis over their estimated weighted-average useful lives of approximately four years, thirteen years and nine years, respectively.

In the fourth quarter of 2016, the Company recorded a non-cash, intangible asset impairment charge of $0.1 million. For additional information related to the intangible asset impairment, see Note 5. There were no impairment charges recorded in 2017 or 2015.

Shipping and Handling Costs

Shipping and handling costs are classified in cost of goods sold in the consolidated statements of operations.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made.

The Company recognizes the tax benefit from an uncertain tax position only if it is “more likely than not” the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no interest or penalties related to unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015.

Based on the Company’s evaluation, it was concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The evaluation was performed for the tax years ended December 31, 2017, 2016, 2015 and 2014, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2017.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. As of the date of enactment, we have adjusted our deferred tax assets and liabilities for our new statutory rate which resulted in a $5.1 million credit to our income tax provision for the year ended December 31, 2017. In addition, we have estimated and recorded a provisional expense $5.3 million for transition tax related to our foreign operations.

Advertising

Costs of advertising, which are expensed as incurred by the Company, were $1.2 million, $1.4 million and $1.0 million for the years ended December 31, 2017, 2016 and 2015, respectively and are included in selling, general and administrative expenses in the consolidated statement of operations.

49

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

Comprehensive Income (Loss)

The components of accumulated comprehensive loss included in the Consolidated Balance Sheets at December 31, 2017 and 2016 are as follows (in thousands):

	Foreign Currency Translation Adjustments
Balance at December 31, 2015 (as revised)	$	(13,802	)
Other comprehensive loss before reclassifications	(7,147		)
Net current-period other comprehensive loss	(7,147		)
Balance at December 31, 2016 (as restated)	(20,949		)
Other comprehensive income before reclassifications	1,720
Net current-period other comprehensive income	1,720
Balance at December 31, 2017 (as restated)	$	(19,229	)

Stock-Based Compensation

The Company accounts for stock-based compensation awards in accordance with ASC 718, Compensation-Stock Compensation. Compensation expense is measured by determining the fair value of each award using the Black-Scholes option valuation model for stock options or the closing share price on the grant date for restricted shares and performance share units. The fair value is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award.

On June 1, 2017, the Compensation Committee approved, pursuant to the 2006 Stock Incentive Plan, awards of performance share units (“PSUs”) for certain executive officers and employees. The PSUs are performance-based awards that will settle in shares of the Company's common stock, in an amount between 0% and 200% of the target award level, based on the cumulative adjusted earnings per share and the return on invested capital achieved by the Company between April 1, 2017 and December 31, 2019. Compensation expense for PSUs is measured by determining the fair value of the award using the closing share price on the grant date and is recognized ratably from the grant date to the vesting date for the number of awards expected to vest. The amount of compensation expense recognized for PSUs is dependent upon a quarterly assessment of the likelihood of achieving the performance conditions and is subject to adjustment based on management's assessment of the Company's performance relative to the target number of shares performance criteria.

Stock-based compensation cost recognized during the period is based on the full grant date fair value of the share-based payment awards adjusted for any forfeitures during the period. Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statement of operations.

Venezuelan Highly Inflationary Economy

Since January 1, 2010, Venezuela has been designated as a highly inflationary economy under GAAP. In accordance with GAAP, local subsidiaries in highly inflationary economies are required to use the U.S. dollar as their functional currency and remeasure the monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion of a currency for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement are recognized currently in income.

Prior to December 31, 2015, the Company translated the net assets and transactions of its Venezuelan subsidiary using the official exchange rate of 6.3 bolivars for each U.S. Dollar. In February 2015, the Venezuelan government introduced a new currency exchange system referred to as the SIMADI which is intended to be a market-driven rate and is more widely available than the official rate or the auction-based exchange system known as the SICAD. Based on the Company’s facts and circumstances as of December 31, 2015, the SIMADI rate was determined to be the most appropriate rate for reporting the operations of the Company’s Venezuelan subsidiary.

50

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

As of December 31, 2015, the SIMADI rate was approximately 198 bolivars for each U.S. Dollar. The remeasurement of the Company’s net assets from the official rate of 6.3 to the SIMADI rate resulted in a foreign exchange loss of approximately $1.5 million during the fourth quarter of 2015. This loss is included in other expense on the consolidated statement of operations.

Recent Accounting Pronouncements

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Scope of Modification Accounting ("ASU 2017-09"), which amends ASC 718, Compensation - Stock Compensation. This ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. This ASU is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the consolidated financial statements and related disclosures.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company's consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, ("ASU 2016-09") which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Under the standard, the income tax effects of awards are required to be recognized in the income statement when the awards vest or are settled, as opposed to in additional paid-in capital under the current guidance. The standard also provides an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, which the Company has elected to adopt. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. In the first quarter of 2017, the Company applied a modified retrospective transition method to account for the changes under the standard related to income taxes and the policy election for recording forfeitures as they occur.

The Company adopted all amendments to the standard at January 1, 2017. The amendments related to the classification of excess tax benefits on the statement of cash flows were adopted prospectively and the classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes was adopted retrospectively. The adoption of both resulted in no prior period adjustments. With the adoption of the standards related to eliminating the requirement that excess tax benefits be realized before companies can recognize them and election to recognize forfeitures as they occur, the Company elected to use the modified retrospective method which resulted in changes to retained earnings, components of equity and net assets. The net cumulative effect of these changes resulted in a $2.1 million increase to additional paid in capital, a $2.3 million decrease to deferred tax liabilities and a $0.2 million increase to retained earnings.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), ("ASU 2016-02") which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosure of key information about leasing arrangements. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for most leases in the balance sheet as well as other qualitative and quantitative disclosures. The update is to be applied using a modified retrospective method and is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

51

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The FASB has issued several amendments to the standard since ASU 2014-09.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective transition method). The Company will adopt ASU 2014-09 on January 1, 2018 using the modified retrospective transition method.

The Company is finalizing updates to the accounting policies and processes to address the variations from current practices, inclusive of the required additional disclosures in the period subsequent to adoption. Specifically, under the current guidance, the Company defers revenue for inventory billed but not yet shipped. As a result of the adoption of the new guidance, in certain situations the Company may be able to recognize revenue for inventory billed but not yet shipped, which could accelerate the timing, but not the total amount, of revenue recognized and would not impact the timing of cash flows. We are in the process of finalizing the measurement of the cumulative effect of adopting the new guidance.

The Company’s analysis of its contracts under the new standard supports two historical conclusions of the Company and its current revenue policy: 1) the Company typically recognizes revenue at a point in time rather than over a period of time and, 2) the Company typically recognizes revenue on a gross basis when the Company is the primary obligor. We plan to issue further disclosures around the adoption of ASC 606 Revenue from Contracts with Customers as part of our first quarter 2018 Form 10-Q filing.

3. Acquisitions

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 11, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100%, the maximum potential payment and reclassified to Due to seller.

On June 30, 2017, the EYELEVEL acquisition reached the required performance measures at the end of its earnout period and the balance of the fair value of the contingent consideration liability was reclassified to due to seller. During the third quarter of 2017 the company paid $17.7 million to settle the final balance owed to the sellers. As of December 31, 2017, there are no outstanding contingent consideration liabilities.

During the twelve months ended December 31, 2017 and 2016 and 2015, the Company recorded expense (income) of $0.7 million, $10.4 million and $(0.3) million, respectively, due to changes in the fair value of the contingent consideration liability. Please refer to Note 11 for a further summary of activities related to the contingent consideration balances.

Shares Issued as Consideration for Acquisitions

Purchase agreements entered by the Company for business combinations often state that the purchase price, including contingent consideration, is to be paid in shares of the Company’s common stock. The value of the shares for each issuance is determined either by the closing price of the Company’s common stock on dates specified in each separate agreement or an average of the closing price of the Company's common stock during and average period prior to the distribution. Generally, the date that determines the share value is the date of the purchase agreement, the last date in a contingent consideration measurement period or the date of issuance to the sellers.

The following table presents the number of shares issued as consideration for acquisitions and contingent consideration and the corresponding value of those shares during the years ended December 31, 2017, 2016 and 2015 (in thousands, except share value amounts):

52

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

	Shares of Common Stock Issued	Value of Shares		Average Share Value
Year ended December 31, 2017:
Payments of contingent consideration	441	$	4,678	$	10.61
Year ended December 31, 2016:
Payments of contingent consideration	244	$	2,012	$	8.25
Year ended December 31, 2015:
Payments of contingent consideration	238	$	1,570	$	6.59

4. Goodwill

The following is a summary of the goodwill balance for each reportable segment as of December 31 (in thousands): 

	North America			International			Total
Balance as of December 31, 2015	$	170,736		$	35,521		$	206,257
Foreign exchange impact	21			(3,578		)	(3,557		)
Balance as of December 31, 2016	170,757			31,943			202,700
Foreign exchange impact	(72		)	(2,682		)	(2,754		)
Balance as of December 31, 2017	$	170,685		$	29,262		$	199,946

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other ("ASC 350"), goodwill is not amortized, but instead is tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of the first day of the fourth fiscal quarter of each year.

The fair value estimates used in the goodwill impairment analysis require significant judgment. The Company's fair value estimates for purposes of performing the analysis are considered Level 3 fair value measurements. The fair value estimates were based on assumptions that management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and operating margins and assumptions about the overall economic climate and the competitive environment for the business.

As discussed in Note 2, the Company performed its annual impairment test as of October 1, 2017 and no impairment was identified. The Company also believes that goodwill is not impaired as of December 31, 2017.

2015 Goodwill Impairment Charge

In the fourth quarter of 2015, the Company performed its annual goodwill impairment test. In the first step of the impairment test, the Company concluded that the carrying amount of a reporting unit in the International segment exceeded its fair value, requiring the Company to perform the second step of the impairment test to measure the amount of impairment loss, if any. The fair value of the North America reporting unit exceeded its carrying value and the second step was not necessary.

Based upon fair value estimates of long-lived assets and discounted cash flows of the reporting unit, the Company compared the implied fair value of the goodwill in this reporting unit with the carrying value. The test resulted in a $37.5 million non-cash, goodwill impairment charge which was recognized in the fourth quarter of 2015. No tax benefit was recognized on the goodwill impairment charge. This charge had no impact on the Company’s cash flows or compliance with debt covenants.

5. Other Intangible Assets 

The following is a summary of the Company’s other intangible assets as of December 31 (in thousands):

53

	2017			2016			Weighted Average Life
Customer lists	$	74,615		$	72,667		13.6
Non-competition agreements	964			943			4.1
Trade names	2,510			2,510			13.3
Patents	57			57			9.0
	78,146			76,177
Less accumulated amortization	(50,583		)	(44,639		)
Intangible assets, net	$	27,563		$	31,538

In accordance with ASC 350, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. The Company’s intangible assets consist of customer lists, non-competition agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of approximately fourteen years, are being amortized using the economic life method. The Company’s non-competition agreements, trade names and patents are being amortized on a straight-line basis over their estimated weighted-average useful lives of approximately four years, thirteen years and nine years, respectively.

Amortization expense related to these intangible assets was $5.0 million, $5.5 million and $5.8 million for the years ended December 31, 2017, 2016 and 2015, respectively.

The estimated amortization expense for the next five years and thereafter, is as follows (in thousands):

2018	$	4,571
2019	4,338
2020	4,168
2021	3,862
2022	3,366
Thereafter	7,258
	$	27,563

Customer List and Trade Name Impairment Charges

During the fourth quarter of 2016, the Company recorded a non-cash, intangible asset impairment charge of $0.1 million related to a trade name acquired in a prior year business combination in the International segment. The charge is included in the depreciation and amortization line item of the income statement.

During the fourth quarter of 2015, the Company recognized a $0.2 million non-cash, intangible asset impairment charge related to certain customer lists acquired in prior year business combinations in the EMEA segment. Due to the global realignment discussed in Note 6, the Company evaluated the affected markets and identified certain customer lists for which undiscounted projected cash flows of the customers in those markets did not exceed the recorded book value of the customer lists. As such, the Company recorded an impairment charge of $0.2 million to reduce the customer lists to their respective fair values during its fourth quarter of 2015. The charge was included in the depreciation and amortization line item of the income statement.

6. Restructuring Activities and Charges 

On December 14, 2015, the Company approved a global realignment plan that allowed the Company to more efficiently meet client needs across its international platform. Through improved integration of global resources, the plan created back office and other efficiencies and allowed for the elimination of approximately 100 positions deemed unnecessary. In connection with these actions, the Company incurred total pre-tax cash restructuring charges of $6.7 million, the majority of which were recognized during 2016. These cash charges included approximately $5.6 million for employee severance and related benefits and $1.1 million for lease and contract termination and other associated costs. The charges were all incurred by the end of 2016 with payouts of the

54

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

charges occurring in 2017 and beyond. As required by law, the Company consulted with each of the affected countries’ local Works Councils throughout implementation of this plan.

During the year ended December 31, 2017, the Company recognized no restructuring charges related to this plan.

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2017 (in thousands):

	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Other			Total
Balance at December 31, 2016	$	1,349		$	17		$	200		$	1,566
Expenses	—			—			—			—
Cash payments	(866		)	(17		)	(200		)	(1,082		)
Balance at December 31, 2017	$	484		$	—		$	—		$	484

During the year ended December 31, 2016, the Company recognized $5.6 million in restructuring charges related to this plan of which $0.5 million, $3.9 million, and $1.2 million related to the North America, International, and Other segments, respectively. The plan was completed in the fourth quarter of 2016 and the remaining cash charges accrued as of December 31, 2016 will be paid out in 2018.

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2016 (in thousands):

	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Other (1)		Total
December 31, 2015	$	284		$	75		$	—	$	359
Expenses	4,552			863			200		5,615
Cash payments	(3,487		)	(921		)	—		(4,408		)
December 31, 2016	$	1,349		$	17		$	200	$	1,566

(1) Other charges relate to professional fees.

During the year ended December 31, 2015, the Company recognized $1.1 million in restructuring charges related to this plan of which $0.2 million and $0.9 million related to the North America and International segments, respectively.

7. Property and Equipment

Property and equipment at December 31, 2017 and 2016 consisted of the following (in thousands):  

	2017			2016
Computer equipment	$	10,985		$	9,568
Software, including internal-use software	78,410			68,980
Office equipment and furniture	6,111			5,073
Leasehold improvements	3,576			3,040
	99,082			86,661
Less accumulated depreciation	(62,368		)	(54,005		)
	$	36,714		$	32,656

Depreciation expense was $8.4 million, $12.4 million and $11.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.  

The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the

55

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

carrying value and the fair value of the impaired asset. During the fourth quarter of 2017, the Company ceased use of one of its internal-use software platforms and recorded $0.4 million of expense within depreciation and amortization.

In accordance with the Company’s fixed asset policy, the Company reviews the estimated useful lives of all the fixed assets, including internally developed software once a year or if there are indicators that a useful life has changed. During the fourth quarter of 2016, there were indicators that the estimated useful lives of certain software assets were longer than the current estimated useful lives. As a result, effective October 1, 2016, the Company changed the estimated useful lives of some of its software assets. The estimated useful lives of such assets were increased by an average of approximately 4.5 years. These assets had a net book value of $20.8 million as of October 1, 2016. The effect of this change in estimate resulted in a reduction of depreciation expense by $1.4 million, increase in net income by $0.8 million and increase in basic and diluted earnings per share by $0.015 for the quarter and year ended December 31, 2016.

8. Revolving Credit Facility

The Company entered into a Credit Agreement, dated as of August 2, 2010, subsequently amended most recently as of February 3, 2017, among the Company, the lenders party thereto and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”). The amendment to the credit agreement, dated August 2, 2010, enables InnerWorkings to participate in receivables sale agreements with certain customer’s lenders. The Credit Agreement includes a revolving commitment amount of $175 million in the aggregate with a maturity date of September 25, 2019 and provides the Company the right to increase the aggregate commitment amount by an additional $50 million. Outstanding borrowings under the revolving credit facility are guaranteed by the Company’s material domestic subsidiaries. The Company’s obligations under the Credit Agreement and such domestic subsidiaries’ guaranty obligations are secured by substantially all of their respective assets. The ranges of applicable rates charged for interest on outstanding loans and letters of credit are 125-250 basis point spread for letter of credit fees and loans based on the Eurodollar rate and 25-150 basis point spread for loans based on the base rate.

The terms of the Credit Agreement include various covenants, including covenants that require the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio. The Credit Agreement requires the Company to maintain a leverage ratio of no more than 3.0 to 1.0 for the quarter ended December 31, 2017 and each period thereafter. The Company is also required to maintain an interest coverage ratio of no less than 5.0 to 1.0. The Company is in compliance with all covenants in the Credit Agreement as of December 31, 2017.

At December 31, 2017, the Company had $32.4 million, as restated, of unused availability under the Credit Agreement and $0.8 million of letters of credit which have not been drawn upon.

The book value of the debt under this Credit Agreement is considered to approximate its fair value as of December 31, 2017 as the interest rates are considered in line with current market rates. This would be considered a Level I asset.

On February 22, 2016, the Company entered into a Revolving Credit Facility (the “Facility”) with Bank of America N.A. to support ongoing working capital needs of the Company. The Facility includes a revolving commitment amount of $5.0 million whereby maturity dates vary based on each individual drawdown. Outstanding borrowings under the Facility are guaranteed by the Company’s assets. Borrowings and repayments are made in renminbi, the official Chinese currency. The applicable interest rate is 110% of the People’s Bank of China’s base rate. The terms of the Facility include limitations on use of funds for working capital purposes as well as customary representations and warranties made by the Company. At December 31, 2017, the Company had $4.7 million of unused availability under the Facility. 

9. Commitments and Contingencies

Lease Commitments

The Company leases many of its office facilities for various terms under long-term, noncancelable operating lease agreements. The leases expire at various dates from fiscal year 2018 through fiscal year 2026. Future minimum lease payments are presented below (in thousands): 

56

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

	Operating Leases
2018	$	6,942
2019	5,298
2020	4,334
2021	2,861
2022	1,699
Thereafter	2,080
Total minimum lease payments	$	23,214

The Company recognizes rental expense on a straight-line basis over the term of the lease. The total rent expense for the years ended December 31, 2017, 2016 and 2015 was $9.9 million, $10.6 million and $11.4 million, respectively and is included in selling, general and administrative expenses in the consolidated statement of operations.

Secured Borrowing Arrangements

Certain international subsidiaries are party to short-term secured borrowing arrangements which allow the Company to borrow against the value of a pool of current accounts receivable. The Company retains possession of the accounts receivable which are pledged as collateral. The pledged amounts are immaterial to the consolidated accounts receivable balance.

Legal Contingencies

In October 2013, the Company removed the former owner of Productions Graphics from his role as President of Productions Graphics, the Company’s French subsidiary. He had been in that role since the Company’s 2011 acquisition of Productions Graphics, a European business then principally owned by him. In December 2013, the former owner of Productions Graphics initiated a wrongful termination claim in the Commercial Court of Paris seeking approximately €0.7 million(approximately $1.0 million) in fees and damages, and this claim is currently pending. In anticipation of this claim, in November 2013, he also obtained a judicial asset attachment order in the amount of €0.7 million (approximately $1.0 million) as payment security; the attachment order was confirmed in January 2014 and the Company filed an appeal of the order. In March 2015, the appellate court ruled in the Company’s favor in the attachment proceedings, releasing all attachments. The Company disputes the allegations of the former owner of Productions Graphics and intends to vigorously defend these matters. In February 2014, based on a review the Company initiated into certain transactions associated with the former owner of Productions Graphics, the Company concluded that he had engaged in fraud by inflating the results of the Productions Graphics business in order to induce the Company to pay him €7.1 million in contingent consideration pursuant to the acquisition agreement. In light of those findings, in February 2014 the Company filed a criminal complaint in France seeking to redress the harm caused by his conduct and this proceeding is currently pending. In addition, in September 2015 the Company initiated a civil claim in the Paris Commercial Court against the former owner of Productions Graphics, seeking civil damages to redress these same harms. All of the pending civil matters have been stayed in deference to the Company's related criminal complaint. In addition to these pending matters, there may be other potential disputes between the Company and the former owner of Productions Graphics relating to the acquisition agreement. The Company had paid €5.8 million (approximately $8.0 million) in fixed consideration and €7.1 million (approximately$9.4 million) in contingent consideration to the former owner of Productions Graphics; the remaining maximum contingent consideration under the acquisition agreement was €34.5 million (approximately $37.6 million) and the Company has determined that none of this amount was earned and payable.

In January 2014, a former finance employee of Productions Graphics initiated wrongful termination and overtime claims in the Labor Court of Boulogne-Billancourt and he currently seeks damages of approximately €0.6 million (approximately $0.7 million). The Company disputes these allegations and intends to vigorously defend these matters. In addition, the Company’s criminal complaint in France, described above, seeks to redress harm caused by this former employee in light of his participation in the fraudulent transactions described above. The labor claim has been stayed in deference to the Company’s related criminal complaint.

In May 2018, shortly following the Company’s announcement of its intention to restate certain historical financial statements, a putative securities class action complaint was filed against the Company and certain of its current and former officers and directors.  The action, Errol Brown, et al., v. InnerWorkings, Inc., et al., is currently pending before the United States District Court for the Central District of California.  The complaint alleges claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Allegations in the complaint include that the Company and its current and former officers and directors made untrue statements or omissions of material fact by issuing inaccurate financial statements for the fiscal years ending December 31, 2015, 2016, and 2017, as well as all interim periods. The putative class seeks an unspecified amount of monetary damages as well as reimbursement

57

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

of fees and costs, including reasonable attorneys’ fees, and other costs. The Company and individual defendants dispute the claims. A motion for appointment of lead plaintiff and lead counsel was filed on July 9, 2018, and is scheduled for hearing on August 6, 2018.

10. Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes ("ASC 740"), under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases.

The provision for income taxes consisted of the following components for the years ended December 31, 2017, 2016 and 2015 (in thousands):

	Year Ended December 31,
	2017		2016			2015
	(as restated)		(as restated)			(as revised)
Current income tax expense:
Federal	$	3,076	$	477		$	—
State	62		159			324
Foreign	4,078		5,972			5,295
Total current income tax expense	7,216		6,608			5,619
Deferred income tax expense (benefit):
Federal	1,959		4,165			2,619
State	1,575		414			166
Foreign	538		(353		)	3,094
Total deferred income tax expense	4,072		4,226			5,879
Income tax expense	$	11,288	$	10,834		$	11,498

The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 differs from the amount computed by applying the U.S. federal income tax rate of 35% to pretax income (loss) because of the effect of the following items (in thousands):  

	Year Ended December 31,
	2017			2016			2015
	(as restated)			(as restated)			(as revised)
Tax expense (benefit) at U.S. federal income tax rate	$	9,706		$	5,175		$	(7,312	)
State income taxes, net of federal income tax effect	883			447			497
Federal and state deferred tax rate change	(5,119		)	—			—
Transition tax	5,323			—			—
Effect of non-US operations	(2,228		)	(781		)	89
Nontaxable contingent liability fair value changes and goodwill impairment	237			3,578			13,083
Research and development credit	(38		)	(140		)	(422		)
Change in valuation allowances	2,103			2,206			5,173
Prior year provision to return adjustment	(581		)	(137		)	(948		)
Write-off of deferred taxes and tax receivables	70			193			858
Nondeductible expense and other	932			293			480
Income tax expense	$	11,288		$	10,834		$	11,498

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the Company's tax assets and liabilities for financial reporting purposes and the amounts used for income tax return reporting purposes. At December 31, 2017 and 2016, the Company’s deferred tax assets and liabilities consisted of the following (in thousands):

58

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

	December 31,
	2017			2016
	(as restated)			(as restated)
Deferred tax assets:
Inventory reserve	$	700		$	902
Other reserves and allowances	370			4,455
Income tax basis in excess of financial statement basis in intangible assets	1,669			3,394
Deductible stock-based compensation	3,687			4,579
Net operating loss carryforward	13,669			10,070
Tax credit carryforwards	428			2,600
	20,523			26,000
Valuation allowance	(10,711		)	(8,292		)
Total deferred tax assets	9,812			17,708
Deferred tax liabilities:
Prepaid & other expenses	(265		)	(138		)
Fixed assets	(4,946		)	(5,913		)
Intangible assets	(15,953		)	(21,392		)
Total deferred tax liabilities	(21,164		)	(27,443		)
Net deferred tax liability	$	(11,352	)	$	(9,735	)

The realizability of deferred income tax assets is based on a more likely than not threshold. If it is determined that it is more likely than not that deferred income tax assets will not be realized, a valuation allowance must be established against the deferred income tax assets. Realization of deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance the Company considers historical taxable income along with other positive and negative evidence in assessing the realizability of its deferred tax assets.

For the years ended December 31, 2017 and 2016, the Company recorded additional valuation allowances of $2.4 million and $1.8 million, respectively, related to operating losses for certain foreign locations.

As of December 31, 2017, the Company has gross federal and state net operating loss (“NOLs”) carryforwards of $0.9 million and $0.5 million, respectively. The federal carryovers begin to expire in 2023 and the state carryovers begin to expire in 2022. The Internal Revenue Code imposes an annual limitation on the utilization of net operating loss carryforwards related to acquired corporations based on a statutory rate of return (usually the “applicable federal funds rate” as defined in the Internal Revenue Code) and the value of the corporation at the time of a “change in ownership” as defined by Section 382. The Company’s total federal NOL as of December 31, 2017 includes $0.6 million of NOLs from acquired corporations. These acquired NOLs have an annual limitation under Section 382 of the Internal Revenue Code of $0.2 million.

As of December 31, 2017, the Company had NOLs in France, Italy, Chile, Germany, South Africa, Japan, and Switzerland of $8.9 million, $0.4 million, $1.3 million, $0.8 million, $0.2 million$0.3 million, and $0.3 million, respectively, which have an indefinite carryover period.

A reserve for an uncertain tax position was recorded during 2015 as a result of certain intercompany charges and expenses. During 2016, a reserve for an uncertain tax position was recorded as a result of a sale of intellectual property between the Company's subsidiaries. The following table summarizes the Company's uncertain tax positions (in thousands):

59

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

	Uncertain tax positions
	(as restated)
Balance at December 31, 2016	$	517
Additions based on tax positions related to the current year	—
Subtractions based on tax positions related to the current year	(35		)
Interest and penalties	17
Balance at December 31, 2017	$	499

As of December 31, 2017, the Company had gross state research and development credit carryforwards of approximately $0.3 million. The carryovers began to expire in 2016.

The Company's intention is to indefinitely reinvest all undistributed earnings of its foreign subsidiaries in accordance with ASC 740. Deferred income taxes were not calculated on undistributed earnings (deficit) of foreign subsidiaries, which were $59.0 million and $34.5 million at December 31, 2017 and 2016, respectively. Determination of the amount of unrecognized deferred tax liability on the undistributed earnings considered indefinitely reinvested is not practicable.

The Company's income (loss) before taxes for its foreign operations was $14.4 million, $13.1 million and $(29.8) million for the years ended December 31, 2017, 2016 and 2015, respectively. 

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. As of the date of enactment, we have adjusted our deferred tax assets and liabilities for our new statutory rate which resulted in a $5.1 million credit to our income tax provision for the year ended December 31, 2017. In addition, we have estimated and recorded a provisional expense of $5.3 million for transition tax related to our foreign operations.

We continue to evaluate the impacts of the Act and will consider additional guidance from the U.S. Treasury Department, IRS or other standard-setting bodies. Further adjustments, if any, will be recorded by us during the measurement period in 2018 as permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. 

We operate under a grant of income tax exemption in Puerto Rico, that became effective for certain operations occurring during the period ending December 31, 2017 and should remain in effect for 20 years as long as specific requirements are satisfied. The impact of this income tax exemption grant decreased foreign taxes by $0.4 million for 2017. The benefit of the tax exemption on diluted earnings per share was less than $0.01.

11. Fair Value Measurement

ASC 820, Fair Value Measurement ("ASC 820") includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions.

The fair value hierarchy consists of the following three levels:

• Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.

• Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data.

• Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

As of December 31, 2017 the Company no longer has any Level 3 assets or liabilities remaining on its condensed consolidated financial statements as a result of the finalization of the contingent consideration liabilities discussed in Note 3. As of December 31, 2016, the only Level 3 liabilities on the Company's financial statements related to its potential contingent consideration payments

60

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

from acquisitions occurring subsequent to January 1, 2009. The fair value of the liabilities determined by this analysis was primarily driven by the probability of reaching the performance measures required by the applicable purchase agreements and the associated discount rates. Probabilities were estimated by reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. If an acquisition reached the required performance measure, the estimated probability would be increased to 100% and reclassified to due to seller, and if the measure was not reached, the probability would have been reduced to reflect the amount earned, if any, depending on the terms of the agreement. Discount rates were determined by applying a risk premium to a risk-free interest rate.

The following tables set forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at December 31, 2016 (in thousands): 

At December 31, 2016	Total Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs  (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent consideration	$	19,283	$	—	$	—	$	19,283

The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):

	Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3)
	Contingent Consideration
Balance at December 31, 2015	$	22,162
Contingent consideration payments paid in cash	(11,374		)
Contingent consideration payments paid in stock	(2,012		)
Change in fair value(1)	10,417
Reclass to Due to seller	402
Foreign exchange impact(2)	(312		)
Balance at December 31, 2016	19,283
Contingent consideration payments paid in cash	(15,345		)
Contingent consideration payments paid in stock	(4,678		)
Change in fair value(1)	677
Foreign exchange impact(2)	63
Balance at December 31, 2017	$	—

(1) Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements, see note 3. These changes are recognized within operating expenses on the consolidated statements of operations.

(2) Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income.

12. Earnings (Loss) Per Share

Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock and restricted stock units were settled for common shares during the period. In addition, dilutive shares would include any shares issuable related to PSUs for which the performance conditions have been met as of the end of the period. For the years ended December 31, 2017, 2016 and 2015, respectively, 1.1 million, 3.8 million and 3.2 million options and restricted common shares were excluded from the calculation as these options and restricted common shares were anti-dilutive.

61

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

The computation of basic and diluted earnings (loss) per common share for the years ended December 31, 2017, 2016 and 2015, is as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Numerator:
Net income (loss)	$	16,430	$	3,949	$	(32,389	)
Denominator:
Denominator for basic earnings (loss) per share—weighted-average shares outstanding	53,851		53,607		52,791
Effect of dilutive securities:
Employee stock options and restricted common shares	1,093		728		—
Contingently issuable shares	—		125		—
Denominator for diluted earnings (loss) per share	54,944		54,460		52,791
Basic earnings (loss) per share	$	0.31	$	0.07	$	(0.61	)
Diluted earnings (loss) per share	$	0.30	$	0.07	$	(0.61	)

13. Share Repurchase Program

On February 12, 2015, the Company announced that its Board of Directors approved a share repurchase program authorizing the repurchase of up to an aggregate of $20 million of its common stock through open market and privately negotiated transactions over a two-year period. On November 2, 2016, the Board of Directors approved a two-year extension to the share repurchase program through February 28, 2019. On May 4, 2017, the Board of Directors authorized the repurchase of up to an additional $30.0 million of its common stock through open market and privately negotiated transactions over a two-year period ending May 31, 2019. The timing and amount of any share repurchases will be determined based on market conditions, share price, and other factors and the program may be discontinued or suspended at any time. Repurchases will be made in compliance with SEC rules and other legal requirements. 

During the year ended December 31, 2017, the Company repurchased 1,121,928 shares of its common stock for an aggregate amount of $11.0 million at an average cost of $9.78 per share. During the year ended December 31, 2016, the Company did not repurchase any shares of its common stock under this program. Shares repurchased under this program are recorded at acquisition cost, including related expenses.

14. Stock-Based Compensation Plans

In 2006, the Company adopted the 2006 Stock Incentive Plan (the "Plan"). Upon adoption, all previously existing plans were merged into the Plan and ceased to separately exist. The Plan was amended and restated effective June 2016 resulting in an increase in the maximum number of shares of common stock that may be issued under the Plan by 2,900,000, from 7,850,000 to 10,750,000. The Company’s policy is to issue shares resulting from the exercise of stock options, issuance of performance stock units and conversion of restricted stock as new shares.

The Company recorded share-based stock compensation expense of $6.8 million, $5.6 million and $5.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. As discussed in Note 2 Recent Accounting Pronouncements, the Company adopted ASU 2016-09 and for the year ended December 31, 2017 began recognizing forfeitures as they occurred. The 2016 and 2015 stock-based compensation expense is recorded net of an estimated forfeiture rate and adjusted to reflect actual forfeiture activity. The estimated forfeiture rates applied as of December 31, 2016 ranged from 7.0% to 8.0% for various types of employees. The Company recorded $0.9 million and $1.0 million of additional stock-based compensation expense for the years ended December 31, 2016 and 2015, respectively, for awards vested which exceeded the expense recorded using the estimated forfeiture rate.

Stock Options

62

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

Eligible employees receive non-qualified stock options as a portion of their total compensation. The options vest over various time periods depending upon the grant, but generally vest ratably over a four year service period. Vested options may be exercised and converted to one share of the Company’s common stock in exchange for the exercise price which is generally equal to the closing share price on the grant date. Compensation expense is measured by determining the fair value of each award using the Black-Scholes option valuation model. The fair value is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. The stock-based compensation expense related to stock options for the years ended December 31, 2017, 2016 and 2015 was $2.9 million, $2.3 million and $2.4 million, respectively.

A summary of stock option activity for the years ended December 31, 2017, 2016 and 2015 is as follows (in thousands, except per share amounts):

	Outstanding Options		Weighted- Average  Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2014	4,046		$	8.35	$	4,725
Granted	975		6.87		—
Exercised	(405	)	2.95		1,604
Forfeited	(556	)	9.58		—
Outstanding at December 31, 2015	4,060		8.37		2,760
Granted	1,348		8.15		—
Exercised	(420	)	6.27		4,455
Forfeited	(227	)	10.20		—
Outstanding at December 31, 2016	4,761		8.40		8,655
Granted	568		10.73		—
Exercised	(428	)	7.85		1,300
Forfeited	(467	)	10.39		539
Outstanding at December 31, 2017	4,434		$	8.57	$	9,340
Options vested and exercisable at December 31, 2017	2,505		$	8.62	$	5,860

The Company’s stock options have a maximum term of 10 years from the date of grant. The weighted average remaining contractual life for options outstanding and options vested and exerciseable at December 31, 2017 is 5.70 and 3.68 years, respectively.

63

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

The weighted-average fair values and ranges of exercise prices for stock options granted during the years ended December 31, 2017, 2016 and 2015, which vest ratably over four or five years, are as follows (in thousands, except per share amounts):

	Options Granted	Weighted-Average Fair Value		Exercise Prices
2015	975	$	3.39	$6.21 - $8.20
2016	1,348	$	3.38	$6.99 - $9.20
2017	568	$	4.42	$9.32 - $11.47

The number of vested options totaled 2.5 million, 2.5 million and 2.5 million as of December 31, 2017, 2016 and 2015, respectively.

The aggregate intrinsic value of options outstanding and exercisable represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of each fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options in 2017, 2016 and 2015, respectively. These amounts change based on the fair market value of the Company’s stock which was $10.03, $9.98 and $7.50 on the last business day of the years ended December 31, 2017, 2016 and 2015, respectively.

The following assumptions were utilized in the Black-Scholes valuation model for options granted in 2017, 2016 and 2015:

	2017	2016	2015
Dividend yield	—	—	—
Risk-free interest rate	1.98%-2.34%	1.53%-2.03%	1.92%-2.12%
Expected life	6.5 years	6.5 years	6 years
Volatility	36.0%-38.0%	38.0%-50.0%	50.0	%

No dividend yield is used as the Company does not currently, nor historically, pay dividends. The risk-free interest rate is based on actual U.S. Treasury zero-coupon rates for bonds commensurate with the expected term. Expected term is estimated based on historical experience related to similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The Company believes that its historical experience provides the best estimate of future expected life. The expected volatility assumption is based on the historical volatility of the Company’s common stock over a period commensurate with the expected term.

There was $5.0 million, $7.4 million and $5.6 million of unrecognized compensation costs related to the stock options granted under the Plan as of December 31, 2017, 2016 and 2015, respectively. This cost is expected to be recognized over a weighted average period of 2.4, 3.6 and 2.8 years, respectively.

The following table summarizes information about all stock options outstanding for the Company as of December 31, 2017 (share amounts in thousands): 

Options Outstanding					Options Vested
Exercise Price	Number Outstanding	Weighted-Average Life Remaining (Years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0.00 - $4.36	64	1.29	$	3.11	64	$	3.11
$4.37 - $7.95	2,189	5.23	$	6.68	1,320	$	6.43
$7.96 - $11.97	1,613	7.50	$	9.55	552	$	9.32
$11.98 - $15.05	568	2.94	$	13.65	568	$	13.65
	4,434	5.70	$	8.57	2,505	$	8.62

Restricted Common Shares

Eligible employees receive restricted common shares as a portion of their total compensation. The restricted common shares vest over various time periods depending upon the grant, but generally vest from one to five years and convert to common stock at the conclusion of the vesting period. The Company measures the compensation cost based on the closing market price of the Company’s

64

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

common stock at the grant date. The stock-based compensation expense related to restricted common shares for the years ended December 31, 2017, 2016 and 2015 was $3.5 million, $3.3 million and $3.5 million, respectively.

A summary of restricted share activity is as follows (in thousands, except per share amounts):

	Outstanding  Restricted Common Shares		Weighted- Average Grant- Date Fair Value
Nonvested Restricted Common shares at December 31, 2014	1,090		$	8.92
Granted	688		6.90
Vested and transferred to unrestricted common stock	(465	)	8.40
Forfeited	(356	)	8.19
Nonvested Restricted Common shares at December 31, 2015	957		7.66
Granted	559		8.24
Vested and transferred to unrestricted common stock	(429	)	7.71
Forfeited	(78	)	8.04
Nonvested Restricted Common shares at December 31, 2016	1,009		7.92
Granted	332		11.00
Vested and transferred to unrestricted common stock	(403	)	8.28
Forfeited	(166	)	8.51
Nonvested Restricted Common shares at December 31, 2017	772		$	8.98

There were $5.1 million, $7.6 million and $6.9 million of total unrecognized compensation costs related to the restricted common shares as of December 31, 2017, 2016 and 2015, respectively. This cost is expected to be recognized over a weighted average period of 2.5, 2.6 and 2.7 years, as of December 31, 2017, 2016 and 2015, respectively.

Performance-Based Restricted Stock Units:

During fiscal 2017, the Company granted a performance-based restricted stock unit award to the Company's executive officers. The performance-based restricted stock unit awards are subject to vesting based on a performance-based condition and a service-based condition. At the end of the three-year service period, based on the cumulative adjusted earnings per share and the return on invested capital achieved by the Company between April 1, 2017 and December 31, 2019 as approved by the Compensation Committee, these performance-based restricted stock units will vest in a percentage of the target number of shares between 0 and 200%, depending on the extent the performance condition is achieved. Each of the units granted represent the right to receive one share of the Company’s common stock at a specified future date. As of December 31, 2017, the number of common shares issuable upon vesting of these PSUs could range from zero to 256,465 shares.

	Outstanding  Performance Share Units		Weighted- Average Grant- Date Fair Value
Nonvested Performance Share Units at December 31, 2016	—		$	—
Granted	151,822		11.10
Forfeited	(23,588	)	11.10
Nonvested Performance Share Units at December 31, 2017	128,234		$	11.10

Compensation expense for PSUs is subject to adjustment based on management's assessment of the Company's performance relative to the target number of shares performance criteria.The stock-based compensation expense related to restricted common shares for the year ended December 31, 2017 was $0.4 million. There was $1.4 million of total unrecognized compensation costs related to the performance-based restricted stock units as of December 31, 2017 that is expected to be recognized over the remaining 2.0 years.

15. Benefit Plans

65

The Company adopted a 401(k) savings plan effective February 1, 2005, covering all of the Company’s employees upon completion of 30 days of service. Employees may contribute a percentage of eligible compensation on both a before-tax basis and after-tax basis. The Company has the right to make discretionary contributions to the plan. For the years ended December 31, 2017, 2016 and 2015, total costs incurred from the Company’s contributions to the 401(k) plan were $1.0 million, $1.0 million and $1.0 million, respectively.

16. Related Party Transactions

Agreements and Services with Related Parties

The Company provides print procurement services to Arthur J. Gallagher & Company. J. Patrick Gallagher, Jr., a member of the Company’s Board of Directors, is the Chairman, President and Chief Executive Officer of Arthur J. Gallagher & Company and has a direct ownership interest in Arthur J. Gallagher & Company. The total amount billed for such procurement services during the years ended December 31, 2017, 2016 and 2015 was $1.9 million, $1.9 million and $1.7 million, respectively. Additionally, Arthur J. Gallagher & Company provides insurance brokerage and risk management services to the Company. As consideration for these services, Arthur J. Gallagher & Company billed the Company $0.1 million, $0.2 million and $0.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. The amounts receivable from Arthur J. Gallagher & Company was $0.2 million and $0.4 million as of December 31, 2017 and 2016, respectively.

In the fourth quarter of 2017 the Company began providing marketing execution services to Enova International, Inc. David Fisher, a member of the Company’s Board of Directors, is the Chairman and Chief Executive Officer of Enova International, Inc. and has a direct ownership interest in Enova International, Inc. The total amount billed for such procurement services during the year ended December 31, 2017 is $0.1 million. The amounts receivable from Enova, Inc. was $0.1 million as of December 31, 2017.

17. Supplemental Cash Flow Information

Supplemental cash flow information is as follows (in thousands):

	Year Ended December 31,
	2017		2016		2015
Cash paid for:
Interest	$	4,072	$	4,338	$	4,306
Income taxes	9,838		5,485		3,863
	$	13,910	$	9,823	$	8,169
Noncash investing and financing activities:
Repurchases of common stock (as restated)	$	91	$	—	$	—
Shares issued as payment of contingent consideration	4,678		2,012		1,570
	$	4,769	$	2,012	$	1,570

18. Business Segments

Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results and makes key operating decisions. The Company is organized and managed as two business segments: North America and International. The North America segment includes operations in the United States and Canada; the International segment includes all other operations across Europe, Asia, Mexico, Central America and South America; Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses. All transactions between segments are presented at their gross amounts and eliminated through Other.

Management evaluates the performance of its operating segments based on net revenues and Adjusted EBITDA, which is a non-U.S. GAAP financial measure. The accounting policies of each of the operating segments are the same as those described in the summary of significant accounting policies in Note 2. Adjusted EBITDA represents income from operations excluding depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities and other items as described below. Management does not evaluate the performance of its operating segments using asset measures. The identifiable assets by segment disclosed in this note are those assets specifically identifiable within each segment and

66

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

include cash, accounts receivable, inventory, goodwill and intangible assets. Shared service assets are primarily comprised of short-term investments, capitalized internal-use software and net property and equipment for the corporate headquarters. 

The table below presents financial information for our reportable operating segments and Other for the fiscal years noted (in thousands): 

	North America		International		Other (2)			Total
Fiscal 2017 (as restated):
Revenue from third parties	$	780,511	$	357,850	$	—		$	1,138,361
Revenue from other segments	5,469		15,137		(20,606		)	—
Total revenue	785,980		372,987		(20,606		)	1,138,361
Adjusted EBITDA(1)	74,230		19,520		(35,867		)	57,883
Fiscal 2016 (as restated):
Revenue from third parties	736,140		358,262		—			1,094,402
Revenue from other segments	6,029		17,526		(23,555		)	—
Total revenue	742,169		375,788		(23,555		)	1,094,402
Adjusted EBITDA(1)	68,434		21,570		(31,392		)	58,612
Fiscal 2015 (as revised):
Revenue from third parties	708,071		320,821		—			1,028,892
Revenue from other segments	7		8,691		(8,698		)	—
Total revenue	708,078		329,512		(8,698		)	1,028,892
Adjusted EBITDA(1)	63,436		15,124		(27,881		)	50,679

(1) Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill and intangible asset impairment charges, restructuring and other charges, secured assets reserves, professional fees related to ASC 606 implementation, business development realignment, CEO search costs, and Czech currency impact on procurement margin is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies.

(2) Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses.

67

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

The table below reconciles Adjusted EBITDA and Income (loss) before income taxes in our Consolidated statement of operations (in thousands):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Adjusted EBITDA	$	57,883	$	58,612	$	50,679
Depreciation and amortization	13,390		17,916		17,472
Stock-based compensation	6,820		5,572		5,873
Change in fair value of contingent consideration	677		10,417		(270		)
Goodwill impairment charge	—		—		37,539
Intangible asset impairment charges	—		70		202
Restructuring and other charges	—		5,615		1,053
Business development realignment	715		—		—
Professional fees related to ASC 606 implementation	829		—		—
CEO search costs	454		—		—
Czech currency impact on procurement margin	860		—		—
Secured asset reserve(1)	—		—		2,023
Total other expense	6,420		4,239		7,678
Income (loss) before income taxes	$	27,718	$	14,783	$	(20,891	)

(1) The Company accrued a reserve of $2.0 million in 2015, respectively, on inventory in which it holds a security interest. The inventory was procured for a former client.

The table below presents total assets for the Company's reportable segments and Other as of December 31, 2017 and December 31, 2016.

	December 31,
	2017		2016
	(as restated)		(as restated)
North America	$	401,415	$	370,403
International	228,321		203,238
Other	19,902		20,346
Total Assets	$	649,638	$	593,987

The Company had long-lived assets, consisting of net property and equipment, in the United States of $21.8 million, $21.2 million at December 31, 2017 and 2016, respectively. Long-lived assets in foreign countries were $14.9 million and $11.4 million at December 31, 2017 and 2016, respectively. 

The Company does not record revenue for financial reporting purposes by product and service category and therefore, it is impracticable for the Company to report revenue in such manner.

68

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

19. Quarterly Financial Data (Unaudited)

The tables below are a condensed summary of the Company’s unaudited quarterly statements of income and quarterly earnings per share data for the years ended December 31, 2016 and 2017 (in thousands). The tables have been restated to correct for the items described in Note 20.  See Notes 20 and 21 for additional information and reconciliations from the amounts as originally reported to the applicable restated amounts:

	Year Ended December 31, 2017
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(as restated)		(as restated)		(as restated)		(as restated)
Revenue	$	264,405	$	280,066	$	288,523	$	305,367
Gross profit	64,704		70,046		71,921		68,787
Net income	5,678		4,374		7,116		(738		)
Net income per share:
Basic	$	0.11	$	0.08	$	0.13	$	(0.01	)
Diluted	$	0.10	$	0.08	$	0.13	$	(0.01	)

	Year Ended December 31, 2016
	First Quarter			Second Quarter			Third Quarter		Fourth Quarter
	(as restated)			(as restated)			(as restated)		(as restated)
Revenue	$	270,461		$	272,212		$	276,002	$	275,727
Gross profit	61,526			65,980			66,581		68,477
Net income (loss)	(3,136		)	(1,905		)	4,225		4,765
Net income (loss) per share:
Basic	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09
Diluted	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09

69

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

20. Restatement and Revision of Prior Period Financial Statements

Subsequent to the original issuance of its financial statements, the Company identified certain errors in its historical annual consolidated financial statements, primarily related to the timing of the recognition of (i) revenue recognition for goods shipped and services performed and (ii) cost of goods sold for certain orders that were not recorded in the period in which the end product was sold to the customer and revenue was recognized. Accordingly, we have restated the financial statements for the years ended December 31, 2017 and 2016 to correct for the identified misstatements.

This Note 20 to the Company’s financial statements discloses the impact on the restated financial statements for the years ended December 31, 2017 and 2016 and the nature and derivation of the associated adjustments. The impact of the Restatement on interim periods in 2017 and 2016 is described in Note 21 (unaudited). The corrections included in the financial statements contained herein are further described below.

Our restated financial statements correct our accounting for recording a portion of costs of goods sold in the incorrect periods, which resulted in a material impact on net income and earnings per share, and have no material impact on our cash flow or liquidity. In addition to the correction of the errors discussed above, the Company has voluntarily made other immaterial corrections in all periods presented. Such immaterial corrections reflected in the Restated and Revised Periods and, together with the other corrections described above, are referred to herein as “Adjustments.”

The corrections included in these financial statements contained herein, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.

Impact of Restatement

The effect of the Restatement for the fiscal years ended December 31, 2017 and 2016 are summarized below. The primary errors corrected by the Restatement are as follows:

(a) Accrued accounts payable - The Company identified an error in a report that was used to support the reconciliation of accrued accounts payable. Correction of this error, when including rollover effect from the immediately preceding prior period, increased cost of goods sold by $2.2 million for the year ended December 31, 2017 and did not materially impact cost of goods sold for the year ended December 31, 2016; and increased accounts payable by $3.0 million and $0.8 million as of December 31, 2017 and 2016, respectively.

(b) FOB destination contracts - During review of the Company’s contracts with its customers, it identified certain contracts with terms indicating that the Company maintains risk of loss on its products until they arrive at the customer’s location. Revenue under these contracts had been recognized at the time of shipment but should have been deferred until delivery. Correction of this error, when including the rollover effect from the immediately preceding period, increased revenue by $3.4 million and $2.7 million for the years ended December 31, 2017 and 2016, respectively; increased cost of goods sold by $2.8 million and $2.1 million for the years ended December 31, 2017 and 2016, respectively; increased inventory by $2.3 million and $3.3 million as of December 31, 2017 and 2016, respectively; increased accounts payable $1.8 million as of December 31, 2017; and did not materially impact unbilled revenue as of December 31, 2017 and decreased unbilled revenue by $1.8 million as of December 31, 2016.

(c) Customer-owned inventory - The Company provides warehousing services to certain of its customers for marketing materials that have been purchased from the Company. At the customer’s request, products are stored at one of the Company’s warehouses until requested to be fulfilled to a customer location. In some cases, the contract with the customer requires payment for the products at the time of delivery to the Company’s warehouse where they are made available for fulfillment at which time it is designated as customer-owned inventory. The Company determined that this customer-owned inventory does not meet all revenue recognition requirements under GAAP at the time of delivery to the Company’s warehouse and should be deferred until it is shipped to the customer. Correction of this error increased deferred revenue by $4.1 million and $4.3 million as of December 31, 2017 and 2016, respectively; and increased inventory by $3.3 million and $3.6 million as of December 31, 2017 and 2016, respectively; and when including the rollover effect from the immediately preceding period did not have a material impact on the consolidated statements of operations for the years ended December 31, 2017 and 2016.

(d) Unbilled revenue - The Company identified revenue from certain customer orders that was earned but not invoiced in 2017 and was not identified in the financial close process. Correction of this error, when including the rollover effect from the immediately preceding periods, increased revenue by $1.0 million in 2017 and did not have a material impact in 2016; increased accounts payable by $1.3 million and $0.9 million as of December 31, 2017 and 2016, respectively; and increased unbilled revenue by $2.1 million and $1.0 million as of December 31, 2017 and 2016.

70

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

(e) Selling, general and administrative - The adjustment to selling, general and administrative expenses primarily related to the impact of the error corrections on the associated commissions and bonuses.

The corrections summarized below include consideration of the income tax effect on the adjustments. The following schedules reconcile the amounts as originally reported in the applicable financial statement to the corresponding restated amounts. For a description of certain adjustments contained in the tables below see the corresponding disclosures labeled (a) through (e) above.

Restated condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments				As Restated
Year Ended December 31, 2017:
Revenue	$	1,136,256	$	2,105		(b)(c)(d)	$	1,138,361
Cost of goods sold	857,921		4,982			(a)(b)(c)	862,903
Gross profit	278,335		(2,877		)		275,458
Selling, general and administrative	225,738		1,515			(e)	227,253
Income from operations	38,530		(4,392		)		34,138
Income before taxes	32,110		(4,392		)		27,718
Income tax expense	13,131		(1,843		)	*	11,288
Net income	18,979		(2,549		)		16,430
Basic earnings per share	$	0.35	$	(0.04	)		$	0.31
Diluted earnings per share	$	0.35	$	(0.05	)		$	0.30
Year Ended December 31, 2016:
Revenue	$	1,090,704	$	3,698		(b)(c)	$	1,094,402
Cost of goods sold	827,156		4,682			(b)(c)	831,838
Gross profit	263,548		(984		)		262,564
Selling, general and administrative	209,967		(443		)	(e)	209,524
Income from operations	19,563		(541		)		19,022
Income before taxes	15,325		(542		)		14,783
Income tax expense	10,955		(121		)	*	10,834
Net income	4,370		(421		)		3,949
Basic earnings per share	$	0.08	$	(0.01	)		$	0.07
Diluted earnings per share	$	0.08	$	(0.01	)		$	0.07

* The adjustment to income tax expense for the years ended December 31, 2017 and 2016 primarily relates to the tax effect of the adjustments summarized above.

Restated condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported			Adjustments			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Comprehensive income	20,697			(2,547		)	18,150
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Comprehensive loss	(2,436		)	(762		)	(3,198		)

71

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

Restated condensed consolidated balance sheet amounts (in thousands)

	As Previously Reported			Adjustments				As Restated
As of December 31, 2017:
Accounts receivable	$	206,712		$	(1,326	)		$	205,386
Unbilled revenue	49,389			627			(d)	50,016
Inventories	34,807			5,887			(b)(c)	40,694
Prepaid expenses	19,638			(1,073		)		18,565
Other current assets	32,694			5,171			**	37,865
Total current assets	373,802			9,286				383,088
Deferred income taxes	612			79				691
Other non-current assets	1,382			254				1,636
Total intangibles and other assets	229,503			333				229,836
Total assets	640,019			9,619				649,638
Accounts payable	$	134,609		$	6,555		(a)(b)(d)	$	141,164
Accrued expenses	33,694			697				34,391
Other current liabilities	20,956			3,122			**	24,078
Deferred revenue	13,685			3,935			(c)	17,620
Total current liabilities	202,943			14,310				217,253
Deferred income taxes	12,348			(305		)		12,043
Other long-term liabilities	6,771			628				7,399
Total liabilities	350,461			14,632				365,093
Accumulated other comprehensive loss	$	(19,079	)	$	(150	)		$	(19,229	)
Retained earnings	129,305			(4,863		)		124,442
Total stockholders' equity	289,559			(5,014		)		284,545
Total liabilities and stockholders' equity	640,019			9,619				649,638
As of December 31, 2016:
Accounts receivable	$	182,874		$	(410	)		$	182,464
Unbilled revenue	32,723			(1,207		)	(b)(d)	31,516
Inventories	31,638			4,810			(b)(c)	36,448
Prepaid expenses	18,772			(313		)		18,459
Other current assets	24,769			(172		)		24,597
Total current assets	321,700			2,708				324,408
Other non-current assets	1,374			280				1,654
Total intangibles and other assets	236,642			280				236,923
Total assets	590,999			2,988				593,987
Accounts payable	$	121,289		$	1,723		(a)(d)	$	123,012
Accrued expenses	30,068			(313		)		29,755
Other current liabilities	22,971			(395		)		22,576
Deferred revenue	12,078			4,324			(c)	16,402
Total current liabilities	205,688			5,340				211,028
Deferred income taxes	11,291			(525		)		10,766
Other long-term liabilities	1,926			638				2,564
Total liabilities	326,373			5,453				331,826

72

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

Accumulated other comprehensive loss	$	(20,799	)	$	(150	)	$	(20,949	)
Retained earnings	110,397			(2,315		)	108,082
Total stockholders' equity	264,626			(2,465		)	262,161
Total liabilities and stockholders' equity	590,999			2,988			593,987

** The changes in Other current assets and Other current liabilities as of December 31, 2017 primarily relate to netting adjustments to income tax accounts.

Restated condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported			Adjustments***			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Deferred income taxes	3,744			328			4,072
Accounts receivable and unbilled revenue	(40,959		)	(918		)	(41,877		)
Inventories	(3,169		)	(1,076		)	(4,245		)
Prepaid expenses and other assets	(8,989		)	(4,558		)	(13,547		)
Accounts payable	13,320			4,832			18,152
Accrued expenses and other liabilities	11,670			3,850			15,520
Net cash provided by operating activities	16,147			(91		)	16,056
Repurchases of common stock	$	(10,976	)	$	91		$	(10,885	)
Net cash used in financing activities	(4,972		)	91			(4,881		)
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Deferred income taxes	4,084			142			4,226
Accounts receivable and unbilled revenue	1,809			(4,460		)	(2,651		)
Inventories	1,690			4,665			6,355
Prepaid expenses and other assets	2,442			(10,648		)	(8,206		)
Accounts payable	(48,955		)	10,547			(38,408		)
Accrued expenses and other liabilities	12,759			174			12,933
Net cash provided by operating activities	10,525			—			10,525

*** The adjustments within the statement of cash flows for the years ended December 31, 2017 and 2016 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

Impact of Revision

As discussed above, Company has decided to voluntarily correct the financial statements for the year ended December 31, 2015, for immaterial errors primarily related to the timing of the recognition of (i) revenue and (ii) cost of goods sold as well as reclassifications between certain working capital accounts. Additionally, immaterial error corrections related to periods prior to January 1, 2015 are reflected as adjustments to beginning retained earnings of $2.6 million and to beginning accumulated other comprehensive loss of $0.2 million for the year ended December 31, 2015.

73

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

Revised condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments		As Revised
Year Ended December 31, 2015:
Revenue	1,029,353		(461	)	1,028,892
Cost of goods sold	789,159		(297	)	788,862
Gross profit	240,194		(164	)	240,030
Selling, general and administrative	197,291		(44	)	197,247
Loss from operations	(13,093	)	(120	)	(13,213	)
Loss before taxes	(20,771	)	(120	)	(20,891	)
Income tax expense	12,292		(794	)	11,498
Net loss	(33,063	)	674		(32,389	)
Basic loss per share	(0.63	)	0.02		(0.61	)
Diluted loss per share	(0.63	)	0.02		(0.61	)

Revised condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported		Adjustments	As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674	(32,389	)
Comprehensive loss	(41,655	)	1,015	(40,640	)

Revised condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported		Adjustments^		As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674		(32,389	)
Bad debt provision	1,949		(264	)	1,685
Deferred income taxes	6,947		(1,068	)	5,879
Accounts receivable and unbilled revenue	(10,361	)	(219	)	(10,580	)
Inventories	(8,188	)	(1,488	)	(9,676	)
Prepaid expenses and other assets	(6,138	)	1,998		(4,140	)
Accounts payable	26,199		(1,097	)	25,102
Accrued expenses and other liabilities	2,118		1,464		3,582
Net cash provided by operating activities	43,402		—		43,402

^The adjustments within the statement of cash flows for the years ended December 31, 2017 and 2016 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

74

InnerWorkings, Inc. and subsidiaries

Notes to Consolidated Financial Statements

21. Restatement of Prior Period Quarterly Financial Statements (Unaudited)

As discussed in greater detail in Note 20 - Restatement and Revision of Prior Period Financial Statements, the Company determined to restate its previously issued unaudited condensed consolidated financial statements for the quarterly periods within the years ended December 31, 2017 and 2016. The following tables summarize the impacts of the results on our previously reported condensed statements of operations and balances sheets included in our Quarterly Reports on Form 10-Q for each respective period. Certain line items in the quarterly financial data below were excluded because they were not impacted by the Restatement.

Condensed consolidated statements of income (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Revenue	$	264,405		$	270,461
Cost of goods sold	199,701			208,935
Gross profit	64,704			61,526
Operating expenses:
Selling, general and administrative expenses	53,615			51,477
Depreciation and amortization	2,904			4,596
Change in fair value of contingent consideration	(1,040		)	1,911
Restructuring charges	—			3,344
Income (loss) from operations	9,225			198
Other income (expense):
Interest income	34			14
Interest expense	(1,003		)	(1,077		)
Other, net	(224		)	(161		)
Total other expense	(1,193		)	(1,224		)
Income (loss) before taxes	8,032			(1,026		)
Income tax expense	2,354			2,110
Net income (loss)	$	5,678		$	(3,136	)
Basic earnings (loss) per share	$	0.11		$	(0.06	)
Diluted earnings (loss) per share	$	0.10		$	(0.06	)
Comprehensive income (loss)	$	7,657		$	(3,411	)

75

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	280,066		$	272,212		$	544,471		$	542,673
Cost of goods sold	210,020			206,232			409,721			415,167
Gross profit	70,046			65,980			134,750			127,506
Operating expenses:
Selling, general and administrative expenses	55,054			51,622			108,669			103,099
Depreciation and amortization	3,182			4,720			6,086			9,316
Change in fair value of contingent consideration	1,884			7,276			844			9,187
Restructuring charges	—			623			—			3,967
Income from operations	9,926			1,739			19,151			1,937
Other income (expense):
Interest income	12			24			46			38
Interest expense	(1,038		)	(985		)	(2,041		)	(2,062		)
Other, net	(1,164		)	291			(1,388		)	130
Total other expense	(2,190		)	(670		)	(3,383		)	(1,894		)
Income before taxes	7,736			1,069			15,768			42
Income tax expense	3,362			2,974			5,716			5,084
Net income (loss)	$	4,374		$	(1,905	)	$	10,052		$	(5,043	)
Basic earnings (loss) per share	$	0.08		$	(0.04	)	$	0.19		$	(0.09	)
Diluted earnings (loss) per share	$	0.08		$	(0.04	)	$	0.18		$	(0.09	)
Comprehensive income (loss)	$	8,253		$	(3,295	)	$	15,911		$	(6,708	)

76

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	288,523		$	276,002		$	832,994		$	818,675
Cost of goods sold	216,602			209,421			626,323			624,588
Gross profit	71,921			66,581			206,671			194,087
Operating expenses:
Selling, general and administrative expenses	57,186			52,466			165,855			155,565
Depreciation and amortization	3,317			5,066			9,403			14,382
Change in fair value of contingent consideration	(167		)	788			677			9,975
Restructuring charges	—			465			—			4,433
Income from operations	11,585			7,796			30,736			9,732
Other income (expense):
Interest income	31			26			77			63
Interest expense	(1,198		)	(1,190		)	(3,239		)	(3,252		)
Other, net	426			(114		)	(962		)	16
Total other expense	(741		)	(1,279		)	(4,124		)	(3,173		)
Income before taxes	10,844			6,517			26,612			6,559
Income tax expense	3,728			2,292			9,444			7,376
Net income (loss)	$	7,116		$	4,225		$	17,168		$	(817	)
Basic earnings (loss) per share	$	0.13		$	0.08		$	0.32		$	(0.02	)
Diluted earnings (loss) per share	$	0.13		$	0.08		$	0.31		$	(0.02	)
Comprehensive income (loss)	$	9,284		$	4,024		$	25,196		$	(2,683	)

77

Quarterly financial data (unaudited)

	Three Months Ended December 31, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	270,418	$	5,309		$	275,727
Gross profit	68,727		(250		)	68,477
Net income	5,047		(282		)	4,765
Net income per share:
Basic	0.09		—			0.09
Diluted	0.09		—			0.09

	Three Months Ended December 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	300,950	$	4,417		$	305,367
Gross profit	71,311		(2,524		)	68,787
Net income (loss)	1,500		(2,238		)	(738		)
Net income (loss) per share:
Basic	0.03		(0.04		)	(0.01		)
Diluted	0.03		(0.04		)	(0.01		)

78

Condensed consolidated balance sheets (unaudited)

	March 31, 2017			June 30, 2017			September 30, 2017
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	29,920		$	23,537		$	27,682
Accounts receivable, net of allowance for doubtful accounts of $2,504, $2,466 and $2,692 respectively	184,713			206,242			200,799
Unbilled revenue	33,771			34,264			48,645
Inventories	36,674			34,558			54,174
Prepaid expenses	23,912			23,588			22,018
Other current assets	20,302			20,475			31,529
Total current assets	329,292			342,664			384,847
Property and equipment, net	34,000			36,030			37,212
Intangibles and other assets:
Goodwill	203,269			205,399			206,704
Intangible assets, net	30,452			29,699			28,745
Deferred income taxes	1,440			1,281			1,432
Other non-current assets	1,633			1,547			1,592
Total intangibles and other assets	236,794			237,926			238,473
Total assets	$	600,086		$	616,620		$	660,532
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	114,616			126,382			130,406
Current portion of contingent consideration	17,165			—			—
Due to seller	1,093			17,842			—
Other current liabilities	24,359			25,210			30,416
Deferred revenue	16,885			15,392			15,709
Accrued expenses	32,422			27,409			32,889
Total current liabilities	206,540			212,235			209,420
Revolving credit facility	113,691			118,658			149,184
Deferred income taxes	9,818			9,876			9,839
Other long-term liabilities	2,697			2,625			2,595
Total liabilities	332,746			343,394			371,038
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 63,438, 63,808 and 63,964 shares issued, 53,565, 53,500 and 53,037 shares outstanding, respectively	6			6			6
Additional paid-in capital	228,106			230,030			232,979
Treasury stock at cost, 9,872, 10,308 and 9,927 shares, respectively	(54,949		)	(59,224		)	(54,938		)
Accumulated other comprehensive loss	(18,970		)	(15,090		)	(12,922		)
Retained earnings	113,147			117,504			124,369
Total stockholders' equity	267,340			273,226			289,494
Total liabilities and stockholders' equity	$	600,086		$	616,620		$	660,532

79

	March 31, 2016			June 30, 2016			September 30, 2016
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	20,929		$	31,606		$	20,787
Accounts receivable, net of allowance for doubtful accounts of $1,759, $1,609 and $2,218, respectively	196,251			188,247			185,659
Unbilled revenue	32,457			29,202			37,982
Inventories	42,350			43,528			52,830
Prepaid expenses	12,524			11,712			11,551
Other current assets	16,699			17,738			31,302
Total current assets	321,210			322,033			340,111
Property and equipment, net	33,208			33,089			32,279
Intangibles and other assets:
Goodwill	206,069			204,897			204,978
Intangible assets, net	36,577			34,831			33,476
Deferred income taxes	788			882			1,123
Other non-current assets	1,469			1,415			1,426
Total intangibles and other assets	244,903			242,025			241,003
Total assets	$	599,321		$	597,148		$	613,393
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	129,894			139,914			129,869
Current portion of contingent consideration	11,131			3,862			19,320
Due to seller	3,604			8,527			1,683
Other current liabilities	24,401			24,200			25,760
Deferred revenue	14,589			15,180			13,409
Accrued expenses	23,939			16,096			20,788
Total current liabilities	207,558			207,779			210,829
Revolving credit facility	118,615			111,566			133,734
Deferred income taxes	9,652			11,061			10,622
Contingent consideration, net of current portion	9,188			14,699			—
Other long-term liabilities	3,129			2,995			2,591
Total liabilities	348,142			348,100			357,776
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 62,867, 63,086 and 63,274 shares issued, 53,321, 53,583 and 53,770 shares outstanding, respectively	6			6			6
Additional paid-in capital	215,723			216,540			219,085
Treasury stock at cost, 9,547, 9,503 and 9,504 shares, respectively	(52,207		)	(51,724		)	(51,724		)
Accumulated other comprehensive loss	(14,077		)	(15,467		)	(15,668		)
Retained earnings	101,734			99,693			103,918
Total stockholders' equity	251,179			249,048			255,617
Total liabilities and stockholders' equity	$	599,321		$	597,148		$	613,393

80

Condensed consolidated statements of cash flows (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	5,678		$	(3,136	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	2,904			4,596
Stock-based compensation expense	1,419			1,241
Deferred income taxes	478			(546		)
Change in fair value of contingent consideration liability	(1,040		)	1,911
Bad debt provision	175			656
Other operating activities	52			52
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(4,680		)	(15,863		)
Inventories	(226		)	453
Prepaid expenses and other assets	(1,167		)	5,968
Change in liabilities, net of acquisitions:
Accounts payable	(8,396		)	(31,526		)
Accrued expenses and other liabilities	4,923			11,627
Net cash used in operating activities	120			(24,566		)
Cash flows from investing activities
Purchases of property and equipment	(3,042		)	(3,987		)
Net cash used in investing activities	(3,042		)	(3,987		)
Cash flows from financing activities
Net borrowings of revolving credit facility	6,519			19,358
Net short-term secured repayments	(801		)	(1,803		)
Repurchases of common stock	(4,342		)	—
Payments of contingent consideration	—			(525		)
Proceeds from exercise of stock options	189			984
Other financing activities	(95		)	382
Net cash provided by in financing activities	1,470			18,396
Effect of exchange rate changes on cash and cash equivalents	448			331
Decrease in cash and cash equivalents	(1,004		)	(9,826		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	29,920		$	20,929

81

	Six Months Ended June 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	10,052		$	(5,043	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	6,086			9,316
Stock-based compensation expense	2,921			2,358
Deferred income taxes	624			557
Change in fair value of contingent consideration liability	844			9,187
Intangible asset impairment charges	—			789
Bad debt provision	82			—
Other operating activities	104			105
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(26,620		)	(4,738		)
Inventories	1,890			(725		)
Prepaid expenses and other assets	(971		)	5,742
Change in liabilities, net of acquisitions:
Accounts payable	3,370			(21,506		)
Accrued expenses and other liabilities	(69		)	3,110
Net cash used in operating activities	(1,687		)	(848		)
Cash flows from investing activities
Purchases of property and equipment	(7,024		)	(7,445		)
Net cash used in investing activities	(7,024		)	(7,445		)
Cash flows from financing activities
Net borrowings of revolving credit facility	11,491			12,553
Net short-term secured borrowings	37			104
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(2,089		)	(4,144		)
Proceeds from exercise of stock options	1,319			1,090
Other financing activities	(119		)	(474		)
Net cash provided by in financing activities	598			9,129
Effect of exchange rate changes on cash and cash equivalents	726			15
(Decrease) increase in cash and cash equivalents	(7,387		)	851
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	23,537			31,606

82

	Nine Months Ended September 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	17,168		$	(817	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	9,403			14,382
Stock-based compensation expense	5,296			4,097
Deferred income taxes	448			372
Change in fair value of contingent consideration liability	677			9,975
Bad debt provision	268			1,433
Other operating activities	157			156
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(35,732		)	(11,573		)
Inventories	(17,726		)	(10,027		)
Prepaid expenses and other assets	(10,567		)	(7,622		)
Change in liabilities, net of acquisitions:
Accounts payable	7,395			(31,551		)
Accrued expenses and other liabilities	10,830			7,543
Net cash used in operating activities	(12,383		)	(23,632		)
Cash flows from investing activities
Purchases of property and equipment	(10,274		)	(10,502		)
Net cash used in investing activities	(10,274		)	(10,502		)
Cash flows from financing activities
Net borrowings of revolving credit facility	42,258			34,722
Net short-term secured borrowings (repayments)	633			(820		)
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(15,345		)	(11,008		)
Proceeds from exercise of stock options	1,824			2,002
Other financing activities	(850		)	(680		)
Net cash provided by in financing activities	18,479			24,216
Effect of exchange rate changes on cash and cash equivalents	936			(50		)
Decrease in cash and cash equivalents	(3,242		)	(9,968		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	27,682		$	20,787

83

Restated and revised consolidated statements of income amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	267,390	$	(2,985	)	$	264,405
Cost of goods sold	203,113		(3,412		)	199,701
Gross profit	64,277		427			64,704
Selling, general and administrative expenses	53,427		188			53,615
Income from operations	8,986		239			9,225
Income before taxes	7,793		239			8,032
Income tax expense	2,337		17			2,354
Net income	5,456		222			5,678
Basic earnings per share	0.10		0.01			0.11
Diluted earnings per share	0.10		—			0.10
Comprehensive income	7,435		222			7,657

	Three Months Ended March 31, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	271,073		$	(612	)	$	270,461
Cost of goods sold	209,127			(192		)	208,935
Gross profit	61,946			(420		)	61,526
Selling, general and administrative expenses	51,492			(15		)	51,477
Income from operations	603			(405		)	198
Loss before taxes	(621		)	(405		)	(1,026		)
Income tax expense	2,072			38			2,110
Net loss	(2,693		)	(443		)	(3,136		)
Basic loss per share	(0.05		)	(0.01		)	(0.06		)
Diluted loss per share	(0.05		)	(0.01		)	(0.06		)
Comprehensive loss	(3,163		)	(248		)	(3,411		)

	Three Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,530	$	536		$	280,066
Cost of goods sold	209,303		717			210,020
Gross profit	70,227		(181		)	70,046
Selling, general and administrative expenses	55,086		(32		)	55,054
Income from operations	10,075		(149		)	9,926
Income before taxes	7,884		(149		)	7,736
Income tax expense	3,391		(29		)	3,362
Net income	4,493		(120		)	4,374
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	8,373		(120		)	8,253

84

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	546,920	$	(2,449	)	$	544,471
Cost of goods sold	412,416		(2,695		)	409,721
Gross profit	134,504		246			134,750
Selling, general and administrative expenses	108,513		156			108,669
Income from operations	19,061		90			19,151
Income before taxes	15,678		90			15,768
Income tax expense	5,727		(11		)	5,716
Net income	9,951		101			10,052
Basic earnings per share	0.19		—			0.19
Diluted earnings per share	0.18		—			0.18
Comprehensive income	15,810		101			15,911

	Three Months Ended June 30, 2016
	As Previously Reported			Adjustments		As Restated
Revenue	$	269,220		$	2,992	$	272,212
Cost of goods sold	204,126			2,106		206,232
Gross profit	65,093			886		65,980
Selling, general and administrative expenses	51,418			203		51,622
Income from operations	1,056			683		1,739
Income before taxes	386			683		1,069
Income tax expense	2,710			264		2,974
Net loss	(2,324		)	419		(1,905		)
Basic loss per share	(0.04		)	—		(0.04		)
Diluted loss per share	(0.04		)	—		(0.04		)
Comprehensive loss	(3,714		)	419		(3,295		)

	Six Months Ended June 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	540,292		$	2,381		$	542,673
Cost of goods sold	413,253			1,914			415,167
Gross profit	127,039			467			127,506
Selling, general and administrative expenses	102,910			189			103,099
Income from operations	1,659			278			1,937
Income (loss) before taxes	(235		)	277			42
Income tax expense	4,782			302			5,084
Net loss	(5,017		)	(26		)	(5,043		)
Basic loss per share	(0.09		)	—			(0.09		)
Diluted loss per share	(0.09		)	—			(0.09		)
Comprehensive loss	(6,877		)	169			(6,708		)

85

	Three Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	288,386	$	137		$	288,523
Cost of goods sold	215,867		735			216,602
Gross profit	72,519		(598		)	71,921
Selling, general and administrative expenses	57,134		52			57,186
Income from operations	12,236		(649		)	11,585
Income before taxes	11,495		(650		)	10,844
Income tax expense	3,967		(239		)	3,728
Net income	7,528		(411		)	7,116
Basic earnings per share	0.14		(0.01		)	0.13
Diluted earnings per share	0.14		(0.01		)	0.13
Comprehensive income	9,696		(411		)	9,284

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	835,306	$	(2,312	)	$	832,994
Cost of goods sold	628,282		(1,959		)	626,323
Gross profit	207,024		(353		)	206,671
Selling, general and administrative expenses	165,647		208			165,855
Income from operations	31,297		(561		)	30,736
Income before taxes	27,173		(562		)	26,612
Income tax expense	9,694		(250		)	9,444
Net income	17,479		(311		)	17,168
Basic earnings per share	0.32		—			0.32
Diluted earnings per share	0.32		(0.01		)	0.31
Comprehensive income	25,506		(311		)	25,196

	Three Months Ended September 30, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,993	$	(3,991	)	$	276,002
Cost of goods sold	212,212		(2,791		)	209,421
Gross profit	67,781		(1,200		)	66,581
Selling, general and administrative expenses	52,601		(135		)	52,466
Income from operations	8,860		(1,064		)	7,796
Income before taxes	7,581		(1,064		)	6,517
Income tax expense	3,240		(948		)	2,292
Net income	4,341		(116		)	4,225
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	4,140		(116		)	4,024

86

	Nine Months Ended September 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	820,286		$	(1,611	)	$	818,675
Cost of goods sold	625,465			(877		)	624,588
Gross profit	194,821			(734		)	194,087
Selling, general and administrative expenses	155,511			54			155,565
Income from operations	10,520			(788		)	9,732
Income before taxes	7,347			(788		)	6,559
Income tax expense	8,023			(647		)	7,376
Net loss	(676		)	(141		)	(817		)
Basic loss per share	(0.01		)	(0.01		)	(0.02		)
Diluted loss per share	(0.01		)	(0.01		)	(0.02		)
Comprehensive loss	(2,201		)	(482		)	(2,683		)

Restated and revised consolidated balance sheet amounts (unaudited)

	As of March 31, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	187,028		(2,315	)	184,713
Unbilled revenue	35,712		(1,941	)	33,771
Inventories	30,338		6,336		36,674
Other current assets	20,598		(296	)	20,302
Total current assets	327,508		1,784		329,292
Other non-current assets	1,353		280		1,633
Total other assets	236,514		280		236,794
Total assets	598,022		2,064		600,086
Accounts payable	114,399		217		114,616
Accrued expenses	32,547		(125	)	32,422
Other current liabilities	25,231		(872	)	24,359
Deferred revenue	12,405		4,480		16,885
Total current liabilities	202,840		3,700		206,540
Deferred income taxes	9,848		(30	)	9,818
Other long-term liabilities	2,060		637		2,697
Total liabilities	328,439		4,307		332,746
Accumulated other comprehensive loss	(18,820	)	(150	)	(18,970	)
Retained earnings	115,240		(2,093	)	113,147
Total stockholders' equity	269,583		(2,243	)	267,340
Total liabilities and stockholders' equity	598,022		2,064		600,086

87

	As of June 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	208,382		(2,140	)	206,242
Unbilled revenue	36,515		(2,251	)	34,264
Inventories	28,192		6,366		34,558
Other current assets	20,949		(474	)	20,475
Total current assets	341,163		1,501		342,664
Other non-current assets	1,267		280		1,547
Total intangibles and other assets	237,646		280		237,926
Total assets	614,839		1,781		616,620
Accounts payable	125,593		789		126,382
Accrued expenses	27,567		(158	)	27,409
Other current liabilities	26,163		(953	)	25,210
Deferred revenue	11,585		3,807		15,392
Total current liabilities	208,750		3,485		212,235
Deferred income taxes	9,852		24		9,876
Other long-term liabilities	1,988		637		2,625
Total liabilities	339,248		4,146		343,394
Accumulated other comprehensive loss	(14,940	)	(150	)	(15,090	)
Retained earnings	119,719		(2,215	)	117,504
Total stockholders' equity	275,591		(2,365	)	273,226
Total liabilities and stockholders' equity	614,839		1,781		616,620

88

	As of September 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	203,306		(2,507	)	200,799
Unbilled revenue	50,130		(1,485	)	48,645
Inventories	48,744		5,430		54,174
Other current assets	31,850		(321	)	31,529
Total current assets	383,730		1,117		384,847
Other non-current assets	1,312		280		1,592
Total intangibles and other assets	238,193		280		238,473
Total assets	659,135		1,397		660,532
Accounts payable	129,600		806		130,406
Accrued expenses	32,994		(105	)	32,889
Other current liabilities	31,589		(1,173	)	30,416
Deferred revenue	11,707		4,002		15,709
Total current liabilities	205,890		3,530		209,420
Deferred income taxes	9,834		5		9,839
Other long-term liabilities	1,958		637		2,595
Total liabilities	366,866		4,172		371,038
Accumulated other comprehensive loss	(12,772	)	(150	)	(12,922	)
Retained earnings	126,994		(2,625	)	124,369
Total stockholders' equity	292,269		(2,775	)	289,494
Total liabilities and stockholders' equity	659,135		1,397		660,532

89

	As of March 31, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	200,629		(4,378	)	196,251
Unbilled revenue	34,548		(2,091	)	32,457
Inventories	34,715		7,635		42,350
Prepaid expenses	12,957		(433	)	12,524
Other current assets	16,708		(8	)	16,699
Total current assets	320,485		725		321,210
Total assets	598,596		725		599,321
Accounts payable	130,048		(154	)	129,894
Accrued expenses	24,257		(318	)	23,939
Deferred revenue	10,975		3,614		14,589
Total current liabilities	204,416		3,142		207,558
Deferred income taxes	10,476		(824	)	9,652
Other long-term liabilities	2,772		358		3,129
Total liabilities	345,466		2,676		348,142
Accumulated other comprehensive loss	(14,463	)	386		(14,077	)
Retained earnings	104,071		(2,337	)	101,734
Total stockholders' equity	253,130		(1,951	)	251,179
Total liabilities and stockholders' equity	598,596		725		599,321

	As of June 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	193,297		(5,050	)	188,247
Unbilled revenue	27,857		1,345		29,202
Inventories	35,901		7,627		43,528
Prepaid expenses	12,145		(433	)	11,712
Other current assets	17,647		92		17,738
Total current assets	318,453		3,580		322,033
Total assets	593,567		3,582		597,148
Accounts payable	136,260		3,654		139,914
Accrued expenses	17,818		(1,722	)	16,096
Deferred revenue	11,793		3,387		15,180
Total current liabilities	202,460		5,319		207,779
Deferred income taxes	11,620		(559	)	11,061
Other long-term liabilities	2,639		356		2,995
Total liabilities	342,984		5,116		348,100
Accumulated other comprehensive loss	(15,853	)	386		(15,467	)
Retained earnings	101,614		(1,921	)	99,693
Total stockholders' equity	250,583		(1,535	)	249,048
Total liabilities and stockholders' equity	593,567		3,581		597,148

90

	As of September 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	190,438		(4,779	)	185,659
Unbilled revenue	40,505		(2,523	)	37,982
Inventories	45,377		7,453		52,830
Prepaid expenses	11,984		(433	)	11,551
Other current assets	30,528		774		31,302
Total current assets	339,619		492		340,111
Total assets	612,901		492		613,393
Accounts payable	129,980		(111	)	129,869
Accrued expenses	21,037		(249	)	20,788
Deferred revenue	9,755		3,654		13,409
Total current liabilities	207,535		3,294		210,829
Deferred income taxes	11,594		(972	)	10,622
Other long-term liabilities	2,235		356		2,591
Total liabilities	355,098		2,678		357,776
Accumulated other comprehensive loss	(15,518	)	(150	)	(15,668	)
Retained earnings	105,954		(2,036	)	103,918
Total stockholders' equity	257,803		(2,186	)	255,617
Total liabilities and stockholders' equity	612,901		492		613,393

91

Restated and revised consolidated statement of cash flow amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments		As Restated
Net income	5,456		222		5,678
Deferred income taxes	(16	)	494		478
Accounts receivable and unbilled revenue	(7,318	)	2,638		(4,680	)
Inventories	1,300		(1,526	)	(226	)
Prepaid expenses and other assets	(979	)	(188	)	(1,167	)
Accounts payable	(6,890	)	(1,506	)	(8,396	)
Accrued expenses and other liabilities	5,057		(134	)	4,923
Net cash provided by operating activities	120		—		120

	Three Months Ended March 31, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(2,693	)	(443	)	(3,136	)
Deferred income taxes	(389	)	(157	)	(546	)
Accounts receivable and unbilled revenue	(16,256	)	393		(15,863	)
Inventories	(1,388	)	1,841		453
Prepaid expenses and other assets	16,382		(10,414	)	5,968
Accounts payable	(40,196	)	8,670		(31,526	)
Accrued expenses and other liabilities	11,518		109		11,627
Net cash used in operating activities	(24,566	)	—		(24,566	)

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	9,951		101		10,052
Deferred income taxes	76		548		624
Accounts receivable and unbilled revenue	(29,395	)	2,775		(26,620	)
Inventories	3,446		(1,556	)	1,890
Prepaid expenses and other assets	(957	)	(14	)	(971	)
Accounts payable	4,304		(934	)	3,370
Accrued expenses and other liabilities	851		(920	)	(69	)
Net cash used in operating activities	(1,687	)	—		(1,687	)

92

	Six Months Ended June 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(5,017	)	(26	)	(5,043	)
Deferred income taxes	450		107		557
Accounts receivable and unbilled revenue	(2,366	)	(2,372	)	(4,738	)
Inventories	(2,573	)	1,848		(725	)
Prepaid expenses and other assets	16,255		(10,513	)	5,742
Accounts payable	(33,984	)	12,478		(21,506	)
Accrued expenses and other liabilities	4,632		(1,522	)	3,110
Net cash used in operating activities	(848	)	—		(848	)

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	17,479		(311	)	17,168
Deferred income taxes	(82	)	530		448
Accounts receivable and unbilled revenue	(38,108	)	2,376		(35,732	)
Inventories	(17,106	)	(620	)	(17,726	)
Prepaid expenses and other assets	(10,401	)	(166	)	(10,567	)
Accounts payable	8,312		(917	)	7,395
Accrued expenses and other liabilities	11,722		(891	)	10,830
Net cash used in operating activities	(12,383	)	—		(12,383	)

	Nine Months Ended September 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(676	)	(141	)	(817	)
Deferred income taxes	677		(305	)	372
Accounts receivable and unbilled revenue	(12,798	)	1,225		(11,573	)
Inventories	(12,050	)	2,023		(10,027	)
Prepaid expenses and other assets	3,574		(11,196	)	(7,622	)
Accounts payable	(40,264	)	8,713		(31,551	)
Accrued expenses and other liabilities	7,861		(318	)	7,543
Net cash used in operating activities	(23,632	)	—		(23,632	)

93

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Valuation and Qualifying Accounts (in thousands)

Description	Balance at Beginning of  Period		Charged to Expense		(Uncollectible Accounts Written Off,  Net of  Recoveries)			Balance at End of Period
Fiscal year ended December 31, 2017 Allowance for doubtful accounts	$	2,622	$	454	$	457		$	3,534
Fiscal year ended December 31, 2016 Allowance for doubtful accounts	$	1,231	$	2,171	$	(780	)	$	2,622
Fiscal year ended December 31, 2015 Allowance for doubtful accounts	$	2,685	$	1,685	$	(3,139	)	$	1,231

94

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures.

In connection with the original filing of our Form 10-K for the year ended December 31, 2017, under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of December 31, 2017.

During the financial statement close process for the year ended December 31, 2017, management identified material weaknesses in our internal control over financial reporting due to control deficiencies and gaps in the design and operating effectiveness of revenue recognition and compensation expense in the Company’s North America business. Our chief executive officer and chief financial officer concluded that due to these material weaknesses, which were disclosed at the time of our original filing on Form 10-K for the year ended December 31, 2017, our disclosure controls and procedures were not effective as of December 31, 2017 such that the information relating to the Company, including consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to the Company’s management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Following the filing of our original Form 10-K and during the financial statement close process for the quarter ended March 31, 2018, management identified an additional material weakness that existed as of December 31, 2017, primarily related to completeness and accuracy of data in certain key reports.

Notwithstanding the ineffectiveness of our disclosure controls and procedures as well as the material weaknesses in our internal control over financial reporting as of December 31, 2017, management believes that (i) this Form 10-K/A does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading with respect to the periods covered by this Annual Report and (ii) the consolidated financial statements, and other financial information, included in this Annual Report fairly present in all material respects in accordance with GAAP, our financial condition, results of operations and cash flows as of, and for, the dates and periods presented.

Our external auditors have issued an unqualified opinion on our consolidated financial statements as of and for the year ended December 31, 2017.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of InnerWorkings, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the receipts and expenditures of the Company are being made only in accordance with appropriate authorization of management and the board of directors; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

All systems of internal control, no matter how well designed, have inherent limitations. Therefore, even those systems deemed to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of

95

inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. The framework used in carrying out our evaluation was the 2013 Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission. In evaluating our information technology controls, we also used components of the framework contained in the Control Objectives for Information and related Technology ("COBIT"), which was developed by the Information Systems Audit and Control Association’s IT Governance Institute, as a complement to the COSO internal control framework.  Based on this evaluation, our management identified control deficiencies as of December 31, 2017, which constituted material weaknesses.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

With respect to revenue recognition, the Company’s controls were ineffective to: (i) ensure revenue was recognized when the risk of loss transferred from the Company to the customer based on an analysis of customer arrangements and delivery terms; (ii) retain and review customer order documentation, including support for assessing whether pricing was fixed and determinable; and (iii) estimate the impact of future credit memos. These deficiencies also impacted unbilled revenue, inventory and cost of sales. With respect to compensation expense, the Company’s controls were ineffective in relation to the design and operation of the review controls over compensation. Finally, with respect to report accuracy, the Company’s controls were ineffective to verify the completeness and accuracy of data in certain key reports used to reconcile revenue and cost accruals during the period-end process.

As a result of the foregoing material weaknesses, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2017.

Remediation Efforts Related to Material Weaknesses

Our management has worked, and continues to work, to strengthen our internal control over financial reporting.  We are committed to ensuring that such controls are operating effectively.

The Company has initiated a plan to remediate the material weaknesses noted above.  Specifically, to remediate deficiencies in revenue recognition controls, the Company will develop and implement controls to: (i) compile and process shipping data and delivery terms in customer contracts and improve related operational processes; (ii) improve review processes and related documentation supporting customer orders and pricing; (iii) improve process for estimating future credit memos; and (iv) implement an improved system, process, and related controls to categorize and track customer contracts based on delivery terms. 

To remediate deficiencies in the controls over the compensation process, the Company will develop and implement controls to ensure that systems used for computing payroll, commission, and bonus expenses are updated with accurate data to reflect approved compensation arrangements. 

To remediate deficiencies with respect to report accuracy, the Company will update the underlying reports used to reconcile revenue and cost accruals during the period-end process to ensure their completeness and accuracy. Additionally, the Company will develop and implement controls over the accuracy and completeness of information used in key controls, including validation of source data, report logic, and report parameters.

We will continue to actively identify, develop, and implement additional measures to materially improve and strengthen our internal control over financial reporting. The material weaknesses cannot be considered remediated until the controls have operated for a sufficient period of time and management has concluded, through testing, that such controls are operating effectively.

Changes in Internal Control Over Financial Reporting

Other than the changes described above, there have been no other changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

96

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors ofInnerWorkings, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited InnerWorkings, Inc.'s and subsidiaries (the Company) internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

In our report dated March 16, 2018 we expressed an adverse opinion that the Company had not maintained effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria. Management has subsequently identified an additional deficiency in controls related to the completeness and accuracy of data in certain key reports used to reconcile revenue and cost accruals during the period-end process, and has further concluded that such deficiency represented a material weakness as of December 31, 2017. As a result, management has updated its assessment, as presented in the accompanying Management’s Report on Internal Control Over Financial Reporting to include the additional identified material weakness. Management’s assessment has not changed the Company’s conclusion that the Company has not maintained effective internal control over financial reporting as of December 31, 2017. Accordingly, our opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2017, as expressed herein, has not changed from that expressed in our previous report.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:

• Management identified a material weakness in controls related to the company’s revenue accounting process, including the related impact on unbilled revenue, cost of goods sold and inventory.

• Management identified a material weakness related to the design and operating effectiveness of the review controls over compensation.

• Management identified a material weakness related to the design of the review controls over the completeness and accuracy of data in certain key reports used to reconcile revenue and cost accruals during the period-end process.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2017 and the related notes and the financial statement schedule listed in the Index at Item 15(a)2 (collectively referred to as the “consolidated financial statements”). These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the 2017 consolidated financial statements, and this report does not affect our report dated July 27, 2018 which expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

97

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Chicago, Illinois

July 27, 2018

98

Item 9B. Other Information

 None.

99

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Certain information required by this Item 10 relating to our directors and executive officers is incorporated by reference herein to our amended Proxy Statement to be filed with the SEC as soon as practicable.

We have adopted a code of ethics, which is posted in the Investor Relations section of our website at http://www.inwk.com. We intend to include on our website any amendments to or waivers from, a provision of the code of ethics that applies to our principal executive officer, principal financial officer or controller that relates to any element of the code of ethics definition contained in Item 406(b) of SEC Regulation S-K. In addition, our board of directors has adopted corporate governance guidelines, which are also posted in the Investor Relations section of our website at http://www.inwk.com.

Item 11. Executive Compensation

Certain information required by this Item 11 relating to remuneration of directors and executive officers and other transactions involving management is incorporated by reference herein to our amended Proxy Statement to be filed with the SEC in connection with our 2018 Annual Meeting of Stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized For Issuance Under Equity Compensation Plans

The following table sets forth information regarding securities authorized for issuance under our equity compensation plans as of December 31, 2017 (in thousands, except per share amount). 

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options (a)	Weighted Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Equity compensation plans approved by security holders(1)	4,434	$	8.57	1,838	(2)
Equity compensation plans not approved by security holders(3)	—	—		—
Total	4,434	$	8.57	1,838

(1) Includes our 2004 Unit Option Plan, which was merged with our 2006 Stock Incentive Plan.

(2) Includes shares remaining available for future issuance under our 2006 Stock Incentive Plan.

(3) There are no equity compensation plans in place not approved by our stockholders.

Certain information required by this Item 12 relating to security ownership of certain beneficial owners and management is incorporated by reference herein from our amended 2018 Proxy Statement to be filed with the SEC in connection with our 2018 Annual Meeting of Stockholders.

Item 13. Certain Relationships and Related Transactions and Director Independence

Certain information required by this Item 13 relating to certain relationships and related transactions and director independence is incorporated by reference herein to our amended Proxy Statement to be filed with the SEC in connection with our 2018 Annual Meeting of Stockholders. 

Item 14. Principal Accountant Fees and Services

100

Certain information required by this Item 14 regarding principal accounting fees and services is incorporated by reference herein from the section entitled “Matters Concerning Our Independent Registered Public Accounting Firm” in our amended 2018 Proxy Statement to be filed with the SEC in connection with our 2018 Annual Meeting of Stockholders.

101

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) (1)  Financial Statements: Reference is made to the Index to Financial Statements and Financial Statement Schedule in the section entitled “Financial Statements and Supplementary Data” in Part II, Item 8 of this Annual Report on Form 10-K/A.

(2) Financial Statement Schedule: Reference is made to the Index to Financial Statements and Schedule II - Valuation and Qualifying Accounts in the section entitled “Financial Statements and Supplementary Data” in Part II, Item 8 of this Annual Report on Form 10-K/A. Schedules not listed above are omitted because they are not required or because the required information is given in the consolidated financial statements or notes thereto.

(3) Exhibits: Exhibits are as set forth in the section entitled “Exhibit Index” which follows the section entitled “Signatures” in this Annual Report on Form 10-K/A. Certain of the exhibits listed in the Exhibit Index have been previously filed with the Securities and Exchange Commission pursuant to the requirements of the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. Such exhibits are identified by the parenthetical references following the listing of each such exhibit and are incorporated by reference.

Exhibits which are incorporated herein by reference can be inspected and copied at the public reference rooms maintained by the SEC in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. SEC filings are also available to the public from commercial document retrieval services and at the Web site maintained by the SEC at http://www.sec.gov.

Exhibit No.	Description
3.1	Second Amended and Restated Certificate of Incorporation.(1)
3.2	Amended and Restated By-Laws.(1)
4.1	Specimen Common Stock Certificate.(2)
10.1	InnerWorkings, LLC 2004 Unit Option Plan.(2)†
10.2	InnerWorkings, Inc. 2006 Stock Incentive Plan, as amended and restated effective June 3, 2016.(4)†
10.3	Form of InnerWorkings Restricted Stock Award Agreement.(11)†
10.4	Form of Stock Option Award Agreement.(11)†
10.5	Form of Performance Share Unit Award Agreement.(11)†
10.6	InnerWorkings, Inc. Annual Incentive Plan.(2)†
10.7	First Amendment to Employee Agreement dated April 6, 2015 by and between Ronald C. Provenzano and InnerWorkings, Inc.(3)†
10.8	Amended and Restated Employment Agreement entered into as of December 19, 2013 by and between Eric D. Belcher and InnerWorkings, Inc.(5)†
10.9	Transition Agreement between Innerworkings, Inc. and Eric D. Belcher, dated February 1, 2018.(13)†
10.10	Employee Agreement entered into as of June 30, 2015 by and between InnerWorkings, Inc. and Jeffrey P. Pritchett.(9)†
10.11	Employee Agreement entered into as of August 23, 2012 by and between InnerWorkings, Inc. and Ronald Provenzano.(10)†
10.12	Employee Agreement entered into as of March 6, 2017 by and between InnerWorkings, Inc. and Robert L. Burkart.(10)†

102

10.13	Amended and Restated Employment Agreement between Innerworkings, Inc. and Charles Hodgkins, dated December 6, 2017.(12)†
10.14	Employment Agreement between Innerworkings, Inc. and Richard Stoddart, dated January 31, 2018. (13)†
10.15	Form of Indemnification Agreement.(2)
10.16	Credit Agreement, dated as of August 2, 2010, by and among InnerWorkings, Inc., as borrower, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, PNC Bank, National Association, as documentation agent and the other lenders party thereto.(6)
10.17	First Amendment to Credit Agreement, dated as of April 20, 2012, by and among InnerWorkings, Inc., as borrower, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, PNC Bank, National Association, as documentation agent and the other lenders party hereto.(7)
10.18	Second Amendment to Credit Agreement, dated as of November 1, 2013, by and among InnerWorkings, Inc., as borrower, the lenders party thereto and Bank of America, N.A., as Administrative Agent.(14)
10.19	Third Amendment to Credit Agreement, dated as of December 27, 2013, by and among InnerWorkings, Inc., as borrower, the lenders party thereto and Bank of America, N.A., as Administrative Agent.(14)
10.20	Fourth Amendment to Credit Agreement, dated as of September 25, 2014, by and among InnerWorkings, Inc., the lenders party thereto and Bank of America, N.A., as Administrative Agent.(8)
10.21	Fifth Amendment to Credit Agreement, dates as of February 3, 2017, by and among InnerWorkings, Inc., the lenders party thereto and Bank of America, N.A., as Administrative Agent.(10)
21.1	Subsidiaries of InnerWorkings, Inc.(14)
23.1	Consent of Ernst & Young LLP.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.LAB	XBRL Taxonomy Label Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

103

(1)	Incorporated by reference to Form S-1 Registration Statement (File No. 333-139811).
(2)	Incorporated by reference to Appendix A to the 2016 Proxy Statement on Schedule 14A filed on April 18, 2016.
(3)	Incorporated by reference to Current Report on Form 8-K filed on April 9, 2015.
(4)	Incorporated by reference to Appendix B to the 2016 Proxy Statement on Schedule 14A filed on April 18, 2016.
(5)	Incorporated by reference to Current Report on Form 8-K filed on December 20, 2013.
(6)	Incorporated by reference to Quarterly Report on Form 10-Q filed on August 6, 2010.
(7)	Incorporated by reference to Current Report on Form 8-K filed on April 26, 2012.
(8)	Incorporated by reference to Current Report on Form 8-K filed on October 1, 2014.
(9)	Incorporated by reference to Current Report on Form 8-K filed on July 6, 2015.
(10)	Incorporated by reference to Annual Report on Form 10-K filed on March 9, 2017.
(11)	Incorporated by reference to Current Report on Form 8-K filed on June 5, 2017.
(12)	Incorporated by reference to Current Report on Form 8-K filed on December 7, 2017.
(13)	Incorporated by reference to Current Report on Form 8-K filed on February 5, 2018.
(14)	Incorporated by reference to Annual Report on Form 10-K filed on March 16, 2018.
†	Management contract or compensatory plan or arrangement of the Company.

104

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INNERWORKINGS, INC.
By:	/ S /    RICHARD S. STODDART
	Richard S. Stoddart
Title:	Chief Executive Officer and
	President

KNOWN BY ALL PERSONS BY THESE PRESENTS, that the individuals whose signatures appear below hereby constitute and appoint Richard Stoddart and Charles Hodgkins and each of them severally, as his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for him or her and in his or her name, place and stead in any and all capacities to sign any and all amendments to this Annual Report on Form 10-K/A and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do or perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or of his substitute or substitutes, may lawfully do to cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 

105

Signature	Title	Date
/ S /    RICHARD S. STODDART	President, Chief Executive Officer and Director	July 27, 2018
Richard S. Stoddart	(principal executive officer)
/ S /    CHARLES D. HODGKINS III	Interim Chief Financial Officer (principal financial officer)	July 27, 2018
Charles D. Hodgkins III
/ S /    WILLIAM C. ATKINS	Global Controller (principal accounting officer)	July 27, 2018
William C. Atkins
*	Chairman of the Board	July 27, 2018
Eric D. Belcher
*	Lead Independent Director	July 27, 2018
Jack M. Greenberg
*	Director	July 27, 2018
Linda S. Wolf
*	Director	July 27, 2018
Charles K. Bobrinskoy
*	Director	July 27, 2018
Julie M. Howard
*	Director	July 27, 2018
David Fisher
*	Director	July 27, 2018
J. Patrick Gallagher

*By:	/s/ Charles D. Hodgkins III
	Charles D. Hodgkins III, as attorney-in-fact

106

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Nos. 333-211883, 333-196759, 333-137173, 333-165363, 333-175103, and 333-183311) on Form S-8 pertaining to the InnerWorkings, Inc. 2006 Stock Incentive Plan, of our reports dated July 27, 2018, with respect to the consolidated financial statements and schedule of InnerWorkings, Inc. and subsidiaries, and the effectiveness of internal control over financial reporting of InnerWorkings, Inc. and subsidiaries included in this Annual Report (Form 10-K/A) for the year ended December 31, 2017.

/s/ Ernst & Young LLP

Chicago, Illinois

July 27, 2018

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Richard S. Stoddart, certify that:

1. I have reviewed this Annual Report on Form 10-K/A of InnerWorkings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/ S /    RICHARD S. STODDART
	Richard S. Stoddart
	Chief Executive Officer

Date: July 27, 2018

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Charles Hodgkins, certify that:

1. I have reviewed this Annual Report on Form 10-K/A of InnerWorkings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/ S /    CHARLES D. HODGKINS III
	Charles D. Hodgkins III
	Interim Chief Financial Officer

Date: July 27, 2018

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of InnerWorkings, Inc. (the “Company”) on Form 10-K/A for the period ending December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Richard S. Stoddart, Chief Executive Officer of the Company, and Charles Hodgkins, Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to our knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/ S /    RICHARD S. STODDART
	Richard S. Stoddart
	Chief Executive Officer
By:	/ S /    CHARLES D. HODGKINS III
	Charles D. Hodgkins III
	Interim Chief Financial Officer

Date: July 27, 2018

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Jul. 24, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	INNERWORKINGS INC
Entity Central Index Key	0001350381
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	INWK
Entity Common Stock, Shares Outstanding		52,171,438
Document Type	10-K/A
Amendment Flag	true
Amendment Description	On May 7, 2018, InnerWorkings, Inc. (the “Company”) filed a Current Report on Form 8-K disclosing its intention to restate certain historical financial statements based on errors identified during the course of its first quarter 2018 financial reporting close process. Accordingly, in this amendment to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 (the “Form 10-K/A”), the Company is restating its historical financial statements previously filed with the Securities and Exchange Commission (the “SEC”) for the years ended December 31, 2017 and 2016 and all interim periods therein (the “Restated Periods”).
Document Period End Date	Dec. 31, 2017
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2017
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 524,995,340

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Revenue	$ 305,367	$ 288,523	$ 280,066	$ 264,405	$ 275,727	$ 276,002	$ 272,212	$ 270,461	$ 544,471	$ 542,673	$ 832,994	$ 818,675	$ 1,138,361	$ 1,094,402	$ 1,028,892
Cost of Goods Sold		216,602	210,020	199,701		209,421	206,232	208,935	409,721	415,167	626,323	624,588	862,903	831,838	788,862
Gross profit	68,787	71,921	70,046	64,704	68,477	66,581	65,980	61,526	134,750	127,506	206,671	194,087	275,458	262,564	240,030
Operating expenses:
Selling, general and administrative expenses		57,186	55,054	53,615		52,466	51,622	51,477	108,669	103,099	165,855	155,565	227,253	209,524	197,247
Depreciation and amortization		3,317	3,182	2,904		5,066	4,720	4,596	6,086	9,316	9,403	14,382	13,390	17,916	17,472
Change in fair value of contingent consideration		(167)	1,884	(1,040)		788	7,276	1,911	844	9,187	677	9,975	677	10,417	(270)
Goodwill impairment charge													0	0	37,539
Intangible asset impairment charges									0	789			0	70	202
Restructuring charges		0	0	0		465	623	3,344	0	3,967	0	4,433	0	5,615	1,053
Income (loss) from operations		11,585	9,926	9,225		7,796	1,739	198	19,151	1,937	30,736	9,732	34,138	19,022	(13,213)
Other income (expense):
Interest income		31	12	34		26	24	14	46	38	77	63	97	86	69
Interest expense		(1,198)	(1,038)	(1,003)		(1,190)	(985)	(1,077)	(2,041)	(2,062)	(3,239)	(3,252)	(4,729)	(4,171)	(4,612)
Other, net		426	(1,164)	(224)		(114)	291	(161)	(1,388)	130	(962)	16	(1,788)	(154)	(3,135)
Total other expense		(741)	(2,190)	(1,193)		(1,279)	(670)	(1,224)	(3,383)	(1,894)	(4,124)	(3,173)	(6,420)	(4,239)	(7,678)
Income (loss) before taxes		10,844	7,736	8,032		6,517	1,069	(1,026)	15,768	42	26,612	6,559	27,718	14,783	(20,891)
Income tax expense		3,728	3,362	2,354		2,292	2,974	2,110	5,716	5,084	9,444	7,376	11,288	10,834	11,498
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Basic earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.11	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.19	$ (0.09)	$ 0.32	$ (0.02)	$ 0.31	$ 0.07	$ (0.61)
Diluted earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.18	$ (0.09)	$ 0.31	$ (0.02)	$ 0.30	$ 0.07	$ (0.61)

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Net income (loss)	$ 16,430	$ 3,949	$ (32,389)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	1,732	(7,168)	(8,592)
Other comprehensive income (loss), before tax	1,732	(7,168)	(8,592)
Income tax expense (benefit) related to components of other comprehensive income (loss)	(12)	21	341
Other comprehensive income (loss), net of tax	1,720	(7,147)	(8,251)
Comprehensive income (loss)	$ 18,150	$ (3,198)	$ (40,640)

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 30,562,000	$ 27,682,000	$ 23,537,000	$ 29,920,000	$ 30,924,000	$ 20,787,000	$ 31,606,000	$ 20,929,000	$ 30,755,000	$ 22,578,000
Accounts receivable, net of allowance for doubtful accounts of $3,534 and $2,622, respectively	205,386,000	200,799,000	206,242,000	184,713,000	182,464,000	185,659,000	188,247,000	196,251,000
Unbilled revenue	50,016,000	48,645,000	34,264,000	33,771,000	31,516,000	37,982,000	29,202,000	32,457,000
Inventories	40,694,000	54,174,000	34,558,000	36,674,000	36,448,000	52,830,000	43,528,000	42,350,000
Prepaid expenses	18,565,000	22,018,000	23,588,000	23,912,000	18,459,000	11,551,000	11,712,000	12,524,000
Other current assets	37,865,000	31,529,000	20,475,000	20,302,000	24,597,000	31,302,000	17,738,000	16,699,000
Total current assets	383,088,000	384,847,000	342,664,000	329,292,000	324,408,000	340,111,000	322,033,000	321,210,000
Property and equipment, net	36,714,000	37,212,000	36,030,000	34,000,000	32,656,000	32,279,000	33,089,000	33,208,000
Intangibles and other assets:
Goodwill	199,946,000	206,704,000	205,399,000	203,269,000	202,700,000	204,978,000	204,897,000	206,069,000	206,257,000
Intangible assets, net	27,563,000	28,745,000	29,699,000	30,452,000	31,538,000	33,476,000	34,831,000	36,577,000
Deferred income taxes	691,000	1,432,000	1,281,000	1,440,000	1,031,000	1,123,000	882,000	788,000
Other non-current assets	1,636,000	1,592,000	1,547,000	1,633,000	1,654,000	1,426,000	1,415,000	1,469,000
Total other assets	229,836,000	238,473,000	237,926,000	236,794,000	236,923,000	241,003,000	242,025,000	244,903,000
Total assets	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000
Current liabilities:
Accounts payable	141,164,000	130,406,000	126,382,000	114,616,000	123,012,000	129,869,000	139,914,000	129,894,000
Current portion of contingent consideration	0	0	0	17,165,000	19,283,000	19,320,000	3,862,000	11,131,000
Other current liabilities	24,078,000	30,416,000	25,210,000	24,359,000	22,576,000	25,760,000	24,200,000	24,401,000
Deferred revenue	17,620,000	15,709,000	15,392,000	16,885,000	16,402,000	13,409,000	15,180,000	14,589,000
Accrued expenses	34,391,000	32,889,000	27,409,000	32,422,000	29,755,000	20,788,000	16,096,000	23,939,000
Total current liabilities	217,253,000	209,420,000	212,235,000	206,540,000	211,028,000	210,829,000	207,779,000	207,558,000
Revolving credit facility	128,398,000	149,184,000	118,658,000	113,691,000	107,468,000	133,734,000	111,566,000	118,615,000
Deferred income taxes	12,043,000	9,839,000	9,876,000	9,818,000	10,766,000	10,622,000	11,060,905	9,652,000
Other long-term liabilities	7,399,000	2,595,000	2,625,000	2,697,000	2,564,000	2,591,000	2,995,000	3,129,000
Total liabilities	365,093,000	371,038,000	343,394,000	332,746,000	331,826,000	357,776,000	348,100,000	348,142,000
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000 and 200,000 shares authorized, 64,075 and 63,391 shares issued, 54,055 and 54,088 shares outstanding, respectively	6,000	6,000	6,000	6,000	6,000	6,000	6,000	6,000
Additional paid-in capital	235,199,000	232,979,000	230,030,000	228,106,000	224,480,000	219,085,000	216,540,000	215,723,000
Treasury stock at cost, 10,020 and 9,303 shares, respectively	(55,873,000)	(54,938,000)	(59,224,000)	(54,949,000)	(49,458,000)	(51,724,000)	(51,724,000)	(52,207,000)
Accumulated other comprehensive loss	(19,229,000)	(12,922,000)	(15,090,000)	(18,970,000)	(20,949,000)	(15,668,000)	(15,467,000)	(14,077,000)
Retained earnings	124,442,000	124,369,000	117,504,000	113,147,000	108,082,000	103,918,000	99,693,000	101,734,000
Total stockholders' equity	284,545,000	289,494,000	273,226,000	267,340,000	262,161,000	255,617,000	249,048,000	251,179,000	$ 252,432,000	$ 290,260,000
Total liabilities and stockholders' equity	$ 649,638,000	$ 660,532,000	$ 616,620,000	$ 600,086,000	$ 593,987,000	$ 613,393,000	$ 597,148,000	$ 599,321,000

XML

Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Balance Sheets Parenthetical [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 3,534	$ 2,622
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	64,075,000	63,391,000
Common stock, shares outstanding	54,055,000	54,088,000
Treasury stock at cost, shares	10,200,000	9,303,000

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning Balance at Dec. 31, 2014	$ 290,260	$ 6	$ (49,996)	$ 207,429	$ (5,551)	$ 138,373
Balance (in shares) at Dec. 31, 2014		61,852,000	9,021,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(32,389)					(32,389)
Other Comprehensive Income (Loss), before Tax	(8,592)
Total other comprehensive loss	(8,251)				(8,251)
Comprehensive income (loss)	(40,640)
Issuance of common stock upon exercise of stock awards	$ 675	$ 0		675
Issuance of common stock upon exercise of stock awards (in shares)	405,000	793,000
Issuance of common stock and treasury shares as consideration for acquisition	$ 1,571		$ 2,686			(1,115)
Issuance of treasury shares as consideration for acquisition (in shares)			238,000
Acquisition of treasury shares	(4,897)		$ (4,897)
Acquisition of treasury shares (in shares)			764,000
Excess tax benefit derived from stock award exercises	(411)			(411)
Stock-based compensation expense	5,873			5,873
Ending Balance at Dec. 31, 2015	252,432	$ 6	$ (52,207)	213,566	(13,802)	104,869
Balance (in shares) at Dec. 31, 2015		62,645,000	9,547,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(3,136)
Comprehensive income (loss)	(3,411)
Ending Balance at Mar. 31, 2016	251,179
Beginning Balance at Dec. 31, 2015	252,432	$ 6	$ (52,207)	213,566	(13,802)	104,869
Balance (in shares) at Dec. 31, 2015		62,645,000	9,547,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(5,043)
Comprehensive income (loss)	(6,708)
Ending Balance at Jun. 30, 2016	249,048
Beginning Balance at Dec. 31, 2015	252,432	$ 6	$ (52,207)	213,566	(13,802)	104,869
Balance (in shares) at Dec. 31, 2015		62,645,000	9,547,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(817)
Comprehensive income (loss)	(2,683)
Ending Balance at Sep. 30, 2016	255,617
Beginning Balance at Dec. 31, 2015	252,432	$ 6	$ (52,207)	213,566	(13,802)	104,869
Balance (in shares) at Dec. 31, 2015		62,645,000	9,547,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	3,949					3,949
Other Comprehensive Income (Loss), before Tax	(7,168)
Total other comprehensive loss	(7,147)				(7,147)
Comprehensive income (loss)	(3,198)
Issuance of common stock upon exercise of stock awards	$ 1,770	$ 0		1,770
Issuance of common stock upon exercise of stock awards (in shares)	420,000	746,000
Issuance of common stock and treasury shares as consideration for acquisition	$ 2,012		$ 2,749			(737)
Issuance of treasury shares as consideration for acquisition (in shares)			244,000
Excess tax benefit derived from stock award exercises	3,572			3,572
Stock-based compensation expense	5,572			5,572
Ending Balance at Dec. 31, 2016	262,161	$ 6	$ (49,458)	224,480	(20,949)	108,082
Balance (in shares) at Dec. 31, 2016		63,391,000	9,303,000
Beginning Balance at Mar. 31, 2016	251,179
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,905)
Comprehensive income (loss)	(3,295)
Ending Balance at Jun. 30, 2016	249,048
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	4,225
Comprehensive income (loss)	4,024
Ending Balance at Sep. 30, 2016	255,617
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	4,765
Ending Balance at Dec. 31, 2016	262,161	$ 6	$ (49,458)	224,480	(20,949)	108,082
Balance (in shares) at Dec. 31, 2016		63,391,000	9,303,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	5,678
Comprehensive income (loss)	7,657
Ending Balance at Mar. 31, 2017	267,340
Beginning Balance at Dec. 31, 2016	262,161	$ 6	$ (49,458)	224,480	(20,949)	108,082
Balance (in shares) at Dec. 31, 2016		63,391,000	9,303,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	10,052
Comprehensive income (loss)	15,911
Ending Balance at Jun. 30, 2017	273,226
Beginning Balance at Dec. 31, 2016	262,161	$ 6	$ (49,458)	224,480	(20,949)	108,082
Balance (in shares) at Dec. 31, 2016		63,391,000	9,303,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	17,168
Comprehensive income (loss)	25,196
Ending Balance at Sep. 30, 2017	289,494
Beginning Balance at Dec. 31, 2016	262,161	$ 6	$ (49,458)	224,480	(20,949)	108,082
Balance (in shares) at Dec. 31, 2016		63,391,000	9,303,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	16,430					16,430
Other Comprehensive Income (Loss), before Tax	1,732
Total other comprehensive loss	1,720				1,720
Comprehensive income (loss)	18,150
Issuance of common stock upon exercise of stock awards	$ 1,421	$ 0		1,421
Issuance of common stock upon exercise of stock awards (in shares)	428,000	648,000
Issuance of common stock and treasury shares as consideration for acquisition	$ 4,678	$ 0	$ 4,561	385		(269)
Issuance of treasury shares as consideration for acquisition (in shares)		(36,000)	405,000
Acquisition of treasury shares	$ (10,976)		$ (10,976)
Acquisition of treasury shares (in shares)	1,121,928		1,122,000
Stock-based compensation expense	$ 6,820			6,820
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification	2,291			2,093		198
Ending Balance at Dec. 31, 2017	284,545	$ 6	$ (55,873)	235,199	(19,229)	124,442
Balance (in shares) at Dec. 31, 2017		64,075,000	10,020,000
Beginning Balance at Mar. 31, 2017	267,340
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	4,374
Comprehensive income (loss)	8,253
Ending Balance at Jun. 30, 2017	273,226
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	7,116
Comprehensive income (loss)	9,284
Ending Balance at Sep. 30, 2017	289,494
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(738)
Ending Balance at Dec. 31, 2017	$ 284,545	$ 6	$ (55,873)	$ 235,199	$ (19,229)	$ 124,442
Balance (in shares) at Dec. 31, 2017		64,075,000	10,020,000

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities
Net income (loss)	$ 16,430	$ 3,949	$ (32,389)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	13,390	17,916	17,472
Stock-based compensation expense	6,820	5,572	5,873
Deferred income taxes	4,072	4,226	5,879
Change in fair value of contingent consideration liability	677	10,417	(270)
Goodwill impairment charge	0	0	37,539
Intangible asset impairment charges	0	70	202
Bad debt provision	454	2,171	1,685
Secured asset reserve	0	0	2,023
Venezuela remeasurement charges	0	0	890
Excess tax benefit from exercise of stock awards	0	(4,030)	0
Other operating activities	210	210	210
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(41,877)	(2,651)	(10,580)
Inventories	(4,245)	6,355	(9,676)
Prepaid expenses and other assets	(13,547)	(8,206)	(4,140)
Change in liabilities, net of acquisitions:
Accounts payable	18,152	(38,408)	25,102
Accrued expenses and other liabilities	15,520	12,933	3,582
Net cash provided by operating activities	16,056	10,525	43,402
Cash flows from investing activities
Purchases of property and equipment	(12,483)	(13,319)	(15,034)
Net cash used in investing activities	(12,483)	(13,319)	(15,034)
Cash flows from financing activities
Net borrowing (repayments) of revolving credit facility	(867)	8,739	(5,281)
Net short-term secured borrowings (repayments)	20,709	405	(799)
Repurchases of common stock	(10,885)	0	(4,897)
Payments of contingent consideration	(15,345)	(11,374)	(8,010)
Proceeds from exercise of stock options	2,663	2,636	1,195
Excess tax benefit from exercise of stock awards	0	4,030	0
Other financing activities	(1,156)	(866)	(594)
Net cash (used in) provided by financing activities	(4,881)	3,570	(18,386)
Effect of exchange rate changes on cash and cash equivalents	948	(607)	(1,805)
(Decrease) increase in cash and cash equivalents	(362)	169	8,177
Cash and cash equivalents, beginning of period	30,924	30,755	22,578
Cash and cash equivalents, end of period	$ 30,562	$ 30,924	$ 30,755

XML

Description of the Business

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business

Description of the Business

InnerWorkings, Inc. (together with its subsidiaries, “the Company”) was incorporated in the state of Delaware on January 3, 2006. The Company is a leading global marketing execution firm for the world's most marketing intensive companies, including those companies in the Fortune 1000, across a wide range of industries. As a comprehensive outsourced enterprise solution, the Company leverages proprietary technology, an extensive supplier network and deep domain expertise to streamline the creation, production and distribution of marketing and promotional materials, signage and displays, retail experiences, events and promotions and packaging across every major market worldwide. The items the Company sources are generally procured through the marketing supply chain and are referred to collectively as marketing materials. The Company’s technology and database of information is designed to capitalize on excess manufacturing capacity and other inefficiencies in the traditional marketing and print supply chain to obtain favorable pricing and to deliver high-quality products and services.

The Company is organized and managed as two business segments, North America and International, and is viewed as two operating segments by the chief operating decision maker for purposes of resource allocation and assessing performance. See Note 18 for further information about the Company’s reportable segments.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Restatement and Revision of Prior Period Financial Statements

The Company has restated herein its audited consolidated financial statements for the years ended December 31, 2017 and 2016 and all interim periods therein and has revised herein its audited consolidated financial statements for the year ended December 31, 2015. The restated financial statements correct the Company’s accounting for recording a portion of costs of goods sold in the incorrect periods and have no material impact on our cash flow or liquidity. The restated and revised financial statements also include adjustments for certain immaterial accounting errors related to all periods covered in the financial statements, which are immaterial individually and in the aggregate. See Notes 20 and 21 for additional information.

The corrections contained in the financial statements, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.    

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of InnerWorkings, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Preparation of Financial Statements and Use of Estimates

The preparation of the consolidated financial statements is in conformity with accounting principles generally accepted in the United States ("GAAP"). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to product returns, allowance for doubtful accounts, inventories and inventory valuation, valuation and impairments of goodwill and long-lived assets, income taxes, accrued bonus, contingencies, stock-based compensation and litigation costs. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates.

Foreign Currency Translation

The Company determines the functional currency for its parent company and each of its subsidiaries by reviewing the currencies in which their respective operating activities occur. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains and losses arising from activities in other than the applicable functional currency are calculated using average exchange rates for the applicable period and reported in net income as a non-operating item in each period. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate.

The net realized gains (losses) on foreign currency transactions was $(1.4) million, $0.6 million and $(3.3) million for the years ended December 31, 2017, 2016 and 2015, respectively. As further discussed in Note 2, the net realized losses on foreign currency transactions for the year ended December 31, 2015 includes a charge of $1.5 million for the remeasurement of the Company's net assets in Venezuela.

Revenue Recognition

The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which is typically met upon shipment or delivery of our products to customers: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders and (iv) collectability is reasonably assured. Unbilled revenue represents shipments or deliveries that have been made to customers for which the related account receivable has not yet been invoiced.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition – Principal Agent Considerations, the Company generally reports revenue on a gross basis because the Company is the primary obligor in its arrangements to procure marketing materials and other products for its customers. Under these arrangements, the Company is responsible for the fulfillment, including the acceptability, of the printed materials and other products. In addition, the Company (i) determines which suppliers are included in its network, (ii) has discretion to select from among the suppliers within its network, (iii) is obligated to pay its suppliers regardless of whether it is paid by its customers and (iv) has reasonable latitude to establish exchange price. In some transactions, the Company also has general inventory risk and is involved in the determination of the nature or characteristics of the printed materials and products. When the Company is not the primary obligor, revenues are reported on a net basis.

The Company recognizes revenue for creative, design, installation, warehousing and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. When provided on a stand-alone basis, the Company recognizes revenue for these services upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date.

The Company records taxes collected from customers and remitted to governmental authorities on a net basis.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are uncollateralized customer obligations due under normal trade terms. Payment terms with customers are generally 30 to 90 days from the invoice date. Accounts receivable are stated at the amount billed to the customer, less an estimate for potential bad debts. Interest is not generally accrued on outstanding balances.

The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company estimates the collectability of its accounts receivable based on a combination of factors including, but not limited to, customer credit ratings and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings or substantial downgrading of credit ratings), the Company provides allowances for bad debts against amounts due to reduce the net recognized receivable to the amount it reasonably believes will be collected. Aged receivables are reviewed on a regular basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Net realizable value is based upon an estimated average selling price reduced by estimated costs of disposal. Inventories primarily consist of purchased finished goods. Finished goods inventory includes consigned inventory held on behalf of customers as well as inventory held at third-party fulfillment centers and subcontractors.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows:

Computer equipment	3 years
Software, including internal-use software	1 to 6 years
Office equipment	5 years
Furniture and fixtures	7 years

Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. 

Internal-Use Software

In accordance with ASC 350-40, Intangibles—Goodwill and Other, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized internal-use software costs are depreciated over the expected economic useful life of three to six years using the straight-line method. Capitalized internal-use software asset depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $5.4 million, $9.2 million and $8.6 million, respectively and is included in total depreciation expense. At December 31, 2017 and 2016, the net book value of internal-use software was $29.7 million and $26.0 million, respectively.

Effective October 1, 2016, the Company changed the estimated useful lives of some of its software assets. The estimated useful lives of such assets were increased by an average of approximately 4.5 years, see note 7.

Goodwill

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"), goodwill is not amortized, but instead is tested for impairment annually or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of the first day of its fourth fiscal quarter of each year.

Under ASC 350, an entity is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the quantitative test is required, in the first step, the fair value for each reporting unit is compared to its book value including goodwill. In the case that the fair value is less than the book value, a second step is performed which compares the implied fair value of goodwill to the book value of goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair values of the identifiable assets and liabilities. If the implied fair value of the goodwill is less than the book value of the goodwill, the difference is recognized as an impairment. 

At October 1, 2017, the Company elected to perform a qualitative assessment of the likelihood that goodwill is impaired. Based on the assessment, no impairment was identified as of October 1, 2017. The Company does not believe that goodwill is impaired as of December 31, 2017.

Other Intangible Assets

In accordance with ASC 350, Intangibles—Goodwill and Other, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. The Company’s intangible assets consist of customer lists, non-competition agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of approximately fourteen years, are being amortized using the economic life method. The Company’s non-competition agreements, trade names and patents are being amortized on the straight-line basis over their estimated weighted-average useful lives of approximately four years, thirteen years and nine years, respectively.

In the fourth quarter of 2016, the Company recorded a non-cash, intangible asset impairment charge of $0.1 million. For additional information related to the intangible asset impairment, see Note 5. There were no impairment charges recorded in 2017 or 2015.

Shipping and Handling Costs

Shipping and handling costs are classified in cost of goods sold in the consolidated statements of operations.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made.

The Company recognizes the tax benefit from an uncertain tax position only if it is “more likely than not” the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no interest or penalties related to unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015.

Based on the Company’s evaluation, it was concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The evaluation was performed for the tax years ended December 31, 2017, 2016, 2015 and 2014, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2017.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. As of the date of enactment, we have adjusted our deferred tax assets and liabilities for our new statutory rate which resulted in a $5.1 million credit to our income tax provision for the year ended December 31, 2017. In addition, we have estimated and recorded a provisional expense $5.3 million for transition tax related to our foreign operations.

Advertising

Costs of advertising, which are expensed as incurred by the Company, were $1.2 million, $1.4 million and $1.0 million for the years ended December 31, 2017, 2016 and 2015, respectively and are included in selling, general and administrative expenses in the consolidated statement of operations.

Comprehensive Income (Loss)

The components of accumulated comprehensive loss included in the Consolidated Balance Sheets at December 31, 2017 and 2016 are as follows (in thousands):

	Foreign Currency Translation Adjustments
Balance at December 31, 2015 (as revised)	$	(13,802	)
Other comprehensive loss before reclassifications	(7,147		)
Net current-period other comprehensive loss	(7,147		)
Balance at December 31, 2016 (as restated)	(20,949		)
Other comprehensive income before reclassifications	1,720
Net current-period other comprehensive income	1,720
Balance at December 31, 2017 (as restated)	$	(19,229	)

Stock-Based Compensation

The Company accounts for stock-based compensation awards in accordance with ASC 718, Compensation-Stock Compensation. Compensation expense is measured by determining the fair value of each award using the Black-Scholes option valuation model for stock options or the closing share price on the grant date for restricted shares and performance share units. The fair value is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award.

On June 1, 2017, the Compensation Committee approved, pursuant to the 2006 Stock Incentive Plan, awards of performance share units (“PSUs”) for certain executive officers and employees. The PSUs are performance-based awards that will settle in shares of the Company's common stock, in an amount between 0% and 200% of the target award level, based on the cumulative adjusted earnings per share and the return on invested capital achieved by the Company between April 1, 2017 and December 31, 2019. Compensation expense for PSUs is measured by determining the fair value of the award using the closing share price on the grant date and is recognized ratably from the grant date to the vesting date for the number of awards expected to vest. The amount of compensation expense recognized for PSUs is dependent upon a quarterly assessment of the likelihood of achieving the performance conditions and is subject to adjustment based on management's assessment of the Company's performance relative to the target number of shares performance criteria.

Stock-based compensation cost recognized during the period is based on the full grant date fair value of the share-based payment awards adjusted for any forfeitures during the period. Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statement of operations.

Venezuelan Highly Inflationary Economy

Since January 1, 2010, Venezuela has been designated as a highly inflationary economy under GAAP. In accordance with GAAP, local subsidiaries in highly inflationary economies are required to use the U.S. dollar as their functional currency and remeasure the monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion of a currency for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement are recognized currently in income.

Prior to December 31, 2015, the Company translated the net assets and transactions of its Venezuelan subsidiary using the official exchange rate of 6.3 bolivars for each U.S. Dollar. In February 2015, the Venezuelan government introduced a new currency exchange system referred to as the SIMADI which is intended to be a market-driven rate and is more widely available than the official rate or the auction-based exchange system known as the SICAD. Based on the Company’s facts and circumstances as of December 31, 2015, the SIMADI rate was determined to be the most appropriate rate for reporting the operations of the Company’s Venezuelan subsidiary.

As of December 31, 2015, the SIMADI rate was approximately 198 bolivars for each U.S. Dollar. The remeasurement of the Company’s net assets from the official rate of 6.3 to the SIMADI rate resulted in a foreign exchange loss of approximately $1.5 million during the fourth quarter of 2015. This loss is included in other expense on the consolidated statement of operations.

Recent Accounting Pronouncements

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Scope of Modification Accounting ("ASU 2017-09"), which amends ASC 718, Compensation - Stock Compensation. This ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. This ASU is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the consolidated financial statements and related disclosures.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company's consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, ("ASU 2016-09") which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Under the standard, the income tax effects of awards are required to be recognized in the income statement when the awards vest or are settled, as opposed to in additional paid-in capital under the current guidance. The standard also provides an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, which the Company has elected to adopt. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. In the first quarter of 2017, the Company applied a modified retrospective transition method to account for the changes under the standard related to income taxes and the policy election for recording forfeitures as they occur.

The Company adopted all amendments to the standard at January 1, 2017. The amendments related to the classification of excess tax benefits on the statement of cash flows were adopted prospectively and the classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes was adopted retrospectively. The adoption of both resulted in no prior period adjustments. With the adoption of the standards related to eliminating the requirement that excess tax benefits be realized before companies can recognize them and election to recognize forfeitures as they occur, the Company elected to use the modified retrospective method which resulted in changes to retained earnings, components of equity and net assets. The net cumulative effect of these changes resulted in a $2.1 million increase to additional paid in capital, a $2.3 million decrease to deferred tax liabilities and a $0.2 million increase to retained earnings.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), ("ASU 2016-02") which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosure of key information about leasing arrangements. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for most leases in the balance sheet as well as other qualitative and quantitative disclosures. The update is to be applied using a modified retrospective method and is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The FASB has issued several amendments to the standard since ASU 2014-09.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective transition method). The Company will adopt ASU 2014-09 on January 1, 2018 using the modified retrospective transition method.

The Company is finalizing updates to the accounting policies and processes to address the variations from current practices, inclusive of the required additional disclosures in the period subsequent to adoption. Specifically, under the current guidance, the Company defers revenue for inventory billed but not yet shipped. As a result of the adoption of the new guidance, in certain situations the Company may be able to recognize revenue for inventory billed but not yet shipped, which could accelerate the timing, but not the total amount, of revenue recognized and would not impact the timing of cash flows. We are in the process of finalizing the measurement of the cumulative effect of adopting the new guidance.

The Company’s analysis of its contracts under the new standard supports two historical conclusions of the Company and its current revenue policy: 1) the Company typically recognizes revenue at a point in time rather than over a period of time and, 2) the Company typically recognizes revenue on a gross basis when the Company is the primary obligor. We plan to issue further disclosures around the adoption of ASC 606 Revenue from Contracts with Customers as part of our first quarter 2018 Form 10-Q filing.

XML

Acquisitions

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Acquisitions

Acquisitions

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 11, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100%, the maximum potential payment and reclassified to Due to seller.

On June 30, 2017, the EYELEVEL acquisition reached the required performance measures at the end of its earnout period and the balance of the fair value of the contingent consideration liability was reclassified to due to seller. During the third quarter of 2017 the company paid $17.7 million to settle the final balance owed to the sellers. As of December 31, 2017, there are no outstanding contingent consideration liabilities.

During the twelve months ended December 31, 2017 and 2016 and 2015, the Company recorded expense (income) of $0.7 million, $10.4 million and $(0.3) million, respectively, due to changes in the fair value of the contingent consideration liability. Please refer to Note 11 for a further summary of activities related to the contingent consideration balances.

Shares Issued as Consideration for Acquisitions

Purchase agreements entered by the Company for business combinations often state that the purchase price, including contingent consideration, is to be paid in shares of the Company’s common stock. The value of the shares for each issuance is determined either by the closing price of the Company’s common stock on dates specified in each separate agreement or an average of the closing price of the Company's common stock during and average period prior to the distribution. Generally, the date that determines the share value is the date of the purchase agreement, the last date in a contingent consideration measurement period or the date of issuance to the sellers.

The following table presents the number of shares issued as consideration for acquisitions and contingent consideration and the corresponding value of those shares during the years ended December 31, 2017, 2016 and 2015 (in thousands, except share value amounts):

	Shares of Common Stock Issued	Value of Shares		Average Share Value
Year ended December 31, 2017:
Payments of contingent consideration	441	$	4,678	$	10.61
Year ended December 31, 2016:
Payments of contingent consideration	244	$	2,012	$	8.25
Year ended December 31, 2015:
Payments of contingent consideration	238	$	1,570	$	6.59

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

Acquisitions

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 11, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100%, the maximum potential payment and reclassified to Due to seller.

On June 30, 2017, the EYELEVEL acquisition reached the required performance measures at the end of its earnout period and the balance of the fair value of the contingent consideration liability was reclassified to due to seller. During the third quarter of 2017 the company paid $17.7 million to settle the final balance owed to the sellers. As of December 31, 2017, there are no outstanding contingent consideration liabilities.

During the twelve months ended December 31, 2017 and 2016 and 2015, the Company recorded expense (income) of $0.7 million, $10.4 million and $(0.3) million, respectively, due to changes in the fair value of the contingent consideration liability. Please refer to Note 11 for a further summary of activities related to the contingent consideration balances.

XML

Goodwill

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The following is a summary of the goodwill balance for each reportable segment as of December 31 (in thousands): 

	North America			International			Total
Balance as of December 31, 2015	$	170,736		$	35,521		$	206,257
Foreign exchange impact	21			(3,578		)	(3,557		)
Balance as of December 31, 2016	170,757			31,943			202,700
Foreign exchange impact	(72		)	(2,682		)	(2,754		)
Balance as of December 31, 2017	$	170,685		$	29,262		$	199,946

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles – Goodwill and Other ("ASC 350"), goodwill is not amortized, but instead is tested for impairment annually, or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of the first day of the fourth fiscal quarter of each year.

The fair value estimates used in the goodwill impairment analysis require significant judgment. The Company's fair value estimates for purposes of performing the analysis are considered Level 3 fair value measurements. The fair value estimates were based on assumptions that management believes to be reasonable, but that are inherently uncertain, including estimates of future revenues and operating margins and assumptions about the overall economic climate and the competitive environment for the business.

As discussed in Note 2, the Company performed its annual impairment test as of October 1, 2017 and no impairment was identified. The Company also believes that goodwill is not impaired as of December 31, 2017.

2015 Goodwill Impairment Charge

In the fourth quarter of 2015, the Company performed its annual goodwill impairment test. In the first step of the impairment test, the Company concluded that the carrying amount of a reporting unit in the International segment exceeded its fair value, requiring the Company to perform the second step of the impairment test to measure the amount of impairment loss, if any. The fair value of the North America reporting unit exceeded its carrying value and the second step was not necessary.

Based upon fair value estimates of long-lived assets and discounted cash flows of the reporting unit, the Company compared the implied fair value of the goodwill in this reporting unit with the carrying value. The test resulted in a $37.5 million non-cash, goodwill impairment charge which was recognized in the fourth quarter of 2015. No tax benefit was recognized on the goodwill impairment charge. This charge had no impact on the Company’s cash flows or compliance with debt covenants.

XML

Other Intangible Assets

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Other Intangible Assets

Other Intangible Assets 

The following is a summary of the Company’s other intangible assets as of December 31 (in thousands):

	2017			2016			Weighted Average Life
Customer lists	$	74,615		$	72,667		13.6
Non-competition agreements	964			943			4.1
Trade names	2,510			2,510			13.3
Patents	57			57			9.0
	78,146			76,177
Less accumulated amortization	(50,583		)	(44,639		)
Intangible assets, net	$	27,563		$	31,538

In accordance with ASC 350, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. The Company’s intangible assets consist of customer lists, non-competition agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of approximately fourteen years, are being amortized using the economic life method. The Company’s non-competition agreements, trade names and patents are being amortized on a straight-line basis over their estimated weighted-average useful lives of approximately four years, thirteen years and nine years, respectively.

Amortization expense related to these intangible assets was $5.0 million, $5.5 million and $5.8 million for the years ended December 31, 2017, 2016 and 2015, respectively.

The estimated amortization expense for the next five years and thereafter, is as follows (in thousands):

2018	$	4,571
2019	4,338
2020	4,168
2021	3,862
2022	3,366
Thereafter	7,258
	$	27,563

Customer List and Trade Name Impairment Charges

During the fourth quarter of 2016, the Company recorded a non-cash, intangible asset impairment charge of $0.1 million related to a trade name acquired in a prior year business combination in the International segment. The charge is included in the depreciation and amortization line item of the income statement.

During the fourth quarter of 2015, the Company recognized a $0.2 million non-cash, intangible asset impairment charge related to certain customer lists acquired in prior year business combinations in the EMEA segment. Due to the global realignment discussed in Note 6, the Company evaluated the affected markets and identified certain customer lists for which undiscounted projected cash flows of the customers in those markets did not exceed the recorded book value of the customer lists. As such, the Company recorded an impairment charge of $0.2 million to reduce the customer lists to their respective fair values during its fourth quarter of 2015. The charge was included in the depreciation and amortization line item of the income statement.

XML

Restructuring Activities and Other Charges

12 Months Ended

Dec. 31, 2017

Restructuring and Related Activities [Abstract]

Restructuring Activities and Other Charges

Restructuring Activities and Charges 

On December 14, 2015, the Company approved a global realignment plan that allowed the Company to more efficiently meet client needs across its international platform. Through improved integration of global resources, the plan created back office and other efficiencies and allowed for the elimination of approximately 100 positions deemed unnecessary. In connection with these actions, the Company incurred total pre-tax cash restructuring charges of $6.7 million, the majority of which were recognized during 2016. These cash charges included approximately $5.6 million for employee severance and related benefits and $1.1 million for lease and contract termination and other associated costs. The charges were all incurred by the end of 2016 with payouts of the charges occurring in 2017 and beyond. As required by law, the Company consulted with each of the affected countries’ local Works Councils throughout implementation of this plan.

During the year ended December 31, 2017, the Company recognized no restructuring charges related to this plan.

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2017 (in thousands):

	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Other			Total
Balance at December 31, 2016	$	1,349		$	17		$	200		$	1,566
Expenses	—			—			—			—
Cash payments	(866		)	(17		)	(200		)	(1,082		)
Balance at December 31, 2017	$	484		$	—		$	—		$	484

During the year ended December 31, 2016, the Company recognized $5.6 million in restructuring charges related to this plan of which $0.5 million, $3.9 million, and $1.2 million related to the North America, International, and Other segments, respectively. The plan was completed in the fourth quarter of 2016 and the remaining cash charges accrued as of December 31, 2016 will be paid out in 2018.

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2016 (in thousands):

	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Other (1)		Total
December 31, 2015	$	284		$	75		$	—	$	359
Expenses	4,552			863			200		5,615
Cash payments	(3,487		)	(921		)	—		(4,408		)
December 31, 2016	$	1,349		$	17		$	200	$	1,566

(1) Other charges relate to professional fees.

During the year ended December 31, 2015, the Company recognized $1.1 million in restructuring charges related to this plan of which $0.2 million and $0.9 million related to the North America and International segments, respectively.

XML

Property and Equipment

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment at December 31, 2017 and 2016 consisted of the following (in thousands):  

	2017			2016
Computer equipment	$	10,985		$	9,568
Software, including internal-use software	78,410			68,980
Office equipment and furniture	6,111			5,073
Leasehold improvements	3,576			3,040
	99,082			86,661
Less accumulated depreciation	(62,368		)	(54,005		)
	$	36,714		$	32,656

Depreciation expense was $8.4 million, $12.4 million and $11.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.  

The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate over its remaining life. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. During the fourth quarter of 2017, the Company ceased use of one of its internal-use software platforms and recorded $0.4 million of expense within depreciation and amortization.

In accordance with the Company’s fixed asset policy, the Company reviews the estimated useful lives of all the fixed assets, including internally developed software once a year or if there are indicators that a useful life has changed. During the fourth quarter of 2016, there were indicators that the estimated useful lives of certain software assets were longer than the current estimated useful lives. As a result, effective October 1, 2016, the Company changed the estimated useful lives of some of its software assets. The estimated useful lives of such assets were increased by an average of approximately 4.5 years. These assets had a net book value of $20.8 million as of October 1, 2016. The effect of this change in estimate resulted in a reduction of depreciation expense by $1.4 million, increase in net income by $0.8 million and increase in basic and diluted earnings per share by $0.015 for the quarter and year ended December 31, 2016.

XML

Revolving Credit Facility

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Revolving Credit Facility

Revolving Credit Facility

The Company entered into a Credit Agreement, dated as of August 2, 2010, subsequently amended most recently as of February 3, 2017, among the Company, the lenders party thereto and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”). The amendment to the credit agreement, dated August 2, 2010, enables InnerWorkings to participate in receivables sale agreements with certain customer’s lenders. The Credit Agreement includes a revolving commitment amount of $175 million in the aggregate with a maturity date of September 25, 2019 and provides the Company the right to increase the aggregate commitment amount by an additional $50 million. Outstanding borrowings under the revolving credit facility are guaranteed by the Company’s material domestic subsidiaries. The Company’s obligations under the Credit Agreement and such domestic subsidiaries’ guaranty obligations are secured by substantially all of their respective assets. The ranges of applicable rates charged for interest on outstanding loans and letters of credit are 125-250 basis point spread for letter of credit fees and loans based on the Eurodollar rate and 25-150 basis point spread for loans based on the base rate.

The terms of the Credit Agreement include various covenants, including covenants that require the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio. The Credit Agreement requires the Company to maintain a leverage ratio of no more than 3.0 to 1.0 for the quarter ended December 31, 2017 and each period thereafter. The Company is also required to maintain an interest coverage ratio of no less than 5.0 to 1.0. The Company is in compliance with all covenants in the Credit Agreement as of December 31, 2017.

At December 31, 2017, the Company had $32.4 million, as restated, of unused availability under the Credit Agreement and $0.8 million of letters of credit which have not been drawn upon.

The book value of the debt under this Credit Agreement is considered to approximate its fair value as of December 31, 2017 as the interest rates are considered in line with current market rates. This would be considered a Level I asset.

On February 22, 2016, the Company entered into a Revolving Credit Facility (the “Facility”) with Bank of America N.A. to support ongoing working capital needs of the Company. The Facility includes a revolving commitment amount of $5.0 million whereby maturity dates vary based on each individual drawdown. Outstanding borrowings under the Facility are guaranteed by the Company’s assets. Borrowings and repayments are made in renminbi, the official Chinese currency. The applicable interest rate is 110% of the People’s Bank of China’s base rate. The terms of the Facility include limitations on use of funds for working capital purposes as well as customary representations and warranties made by the Company. At December 31, 2017, the Company had $4.7 million of unused availability under the Facility.

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lease Commitments

The Company leases many of its office facilities for various terms under long-term, noncancelable operating lease agreements. The leases expire at various dates from fiscal year 2018 through fiscal year 2026. Future minimum lease payments are presented below (in thousands): 

	Operating Leases
2018	$	6,942
2019	5,298
2020	4,334
2021	2,861
2022	1,699
Thereafter	2,080
Total minimum lease payments	$	23,214

The Company recognizes rental expense on a straight-line basis over the term of the lease. The total rent expense for the years ended December 31, 2017, 2016 and 2015 was $9.9 million, $10.6 million and $11.4 million, respectively and is included in selling, general and administrative expenses in the consolidated statement of operations.

Secured Borrowing Arrangements

Certain international subsidiaries are party to short-term secured borrowing arrangements which allow the Company to borrow against the value of a pool of current accounts receivable. The Company retains possession of the accounts receivable which are pledged as collateral. The pledged amounts are immaterial to the consolidated accounts receivable balance.

Legal Contingencies

In October 2013, the Company removed the former owner of Productions Graphics from his role as President of Productions Graphics, the Company’s French subsidiary. He had been in that role since the Company’s 2011 acquisition of Productions Graphics, a European business then principally owned by him. In December 2013, the former owner of Productions Graphics initiated a wrongful termination claim in the Commercial Court of Paris seeking approximately €0.7 million(approximately $1.0 million) in fees and damages, and this claim is currently pending. In anticipation of this claim, in November 2013, he also obtained a judicial asset attachment order in the amount of €0.7 million (approximately $1.0 million) as payment security; the attachment order was confirmed in January 2014 and the Company filed an appeal of the order. In March 2015, the appellate court ruled in the Company’s favor in the attachment proceedings, releasing all attachments. The Company disputes the allegations of the former owner of Productions Graphics and intends to vigorously defend these matters. In February 2014, based on a review the Company initiated into certain transactions associated with the former owner of Productions Graphics, the Company concluded that he had engaged in fraud by inflating the results of the Productions Graphics business in order to induce the Company to pay him €7.1 million in contingent consideration pursuant to the acquisition agreement. In light of those findings, in February 2014 the Company filed a criminal complaint in France seeking to redress the harm caused by his conduct and this proceeding is currently pending. In addition, in September 2015 the Company initiated a civil claim in the Paris Commercial Court against the former owner of Productions Graphics, seeking civil damages to redress these same harms. All of the pending civil matters have been stayed in deference to the Company's related criminal complaint. In addition to these pending matters, there may be other potential disputes between the Company and the former owner of Productions Graphics relating to the acquisition agreement. The Company had paid €5.8 million (approximately $8.0 million) in fixed consideration and €7.1 million (approximately$9.4 million) in contingent consideration to the former owner of Productions Graphics; the remaining maximum contingent consideration under the acquisition agreement was €34.5 million (approximately $37.6 million) and the Company has determined that none of this amount was earned and payable.

In January 2014, a former finance employee of Productions Graphics initiated wrongful termination and overtime claims in the Labor Court of Boulogne-Billancourt and he currently seeks damages of approximately €0.6 million (approximately $0.7 million). The Company disputes these allegations and intends to vigorously defend these matters. In addition, the Company’s criminal complaint in France, described above, seeks to redress harm caused by this former employee in light of his participation in the fraudulent transactions described above. The labor claim has been stayed in deference to the Company’s related criminal complaint.

In May 2018, shortly following the Company’s announcement of its intention to restate certain historical financial statements, a putative securities class action complaint was filed against the Company and certain of its current and former officers and directors.  The action, Errol Brown, et al., v. InnerWorkings, Inc., et al., is currently pending before the United States District Court for the Central District of California.  The complaint alleges claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Allegations in the complaint include that the Company and its current and former officers and directors made untrue statements or omissions of material fact by issuing inaccurate financial statements for the fiscal years ending December 31, 2015, 2016, and 2017, as well as all interim periods. The putative class seeks an unspecified amount of monetary damages as well as reimbursement of fees and costs, including reasonable attorneys’ fees, and other costs. The Company and individual defendants dispute the claims. A motion for appointment of lead plaintiff and lead counsel was filed on July 9, 2018, and is scheduled for hearing on August 6, 2018.

XML

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes ("ASC 740"), under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases.

The provision for income taxes consisted of the following components for the years ended December 31, 2017, 2016 and 2015 (in thousands):

	Year Ended December 31,
	2017		2016			2015
	(as restated)		(as restated)			(as revised)
Current income tax expense:
Federal	$	3,076	$	477		$	—
State	62		159			324
Foreign	4,078		5,972			5,295
Total current income tax expense	7,216		6,608			5,619
Deferred income tax expense (benefit):
Federal	1,959		4,165			2,619
State	1,575		414			166
Foreign	538		(353		)	3,094
Total deferred income tax expense	4,072		4,226			5,879
Income tax expense	$	11,288	$	10,834		$	11,498

The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 differs from the amount computed by applying the U.S. federal income tax rate of 35% to pretax income (loss) because of the effect of the following items (in thousands):  

	Year Ended December 31,
	2017			2016			2015
	(as restated)			(as restated)			(as revised)
Tax expense (benefit) at U.S. federal income tax rate	$	9,706		$	5,175		$	(7,312	)
State income taxes, net of federal income tax effect	883			447			497
Federal and state deferred tax rate change	(5,119		)	—			—
Transition tax	5,323			—			—
Effect of non-US operations	(2,228		)	(781		)	89
Nontaxable contingent liability fair value changes and goodwill impairment	237			3,578			13,083
Research and development credit	(38		)	(140		)	(422		)
Change in valuation allowances	2,103			2,206			5,173
Prior year provision to return adjustment	(581		)	(137		)	(948		)
Write-off of deferred taxes and tax receivables	70			193			858
Nondeductible expense and other	932			293			480
Income tax expense	$	11,288		$	10,834		$	11,498

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the Company's tax assets and liabilities for financial reporting purposes and the amounts used for income tax return reporting purposes. At December 31, 2017 and 2016, the Company’s deferred tax assets and liabilities consisted of the following (in thousands):

	December 31,
	2017			2016
	(as restated)			(as restated)
Deferred tax assets:
Inventory reserve	$	700		$	902
Other reserves and allowances	370			4,455
Income tax basis in excess of financial statement basis in intangible assets	1,669			3,394
Deductible stock-based compensation	3,687			4,579
Net operating loss carryforward	13,669			10,070
Tax credit carryforwards	428			2,600
	20,523			26,000
Valuation allowance	(10,711		)	(8,292		)
Total deferred tax assets	9,812			17,708
Deferred tax liabilities:
Prepaid & other expenses	(265		)	(138		)
Fixed assets	(4,946		)	(5,913		)
Intangible assets	(15,953		)	(21,392		)
Total deferred tax liabilities	(21,164		)	(27,443		)
Net deferred tax liability	$	(11,352	)	$	(9,735	)

The realizability of deferred income tax assets is based on a more likely than not threshold. If it is determined that it is more likely than not that deferred income tax assets will not be realized, a valuation allowance must be established against the deferred income tax assets. Realization of deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance the Company considers historical taxable income along with other positive and negative evidence in assessing the realizability of its deferred tax assets.

For the years ended December 31, 2017 and 2016, the Company recorded additional valuation allowances of $2.4 million and $1.8 million, respectively, related to operating losses for certain foreign locations.

As of December 31, 2017, the Company has gross federal and state net operating loss (“NOLs”) carryforwards of $0.9 million and $0.5 million, respectively. The federal carryovers begin to expire in 2023 and the state carryovers begin to expire in 2022. The Internal Revenue Code imposes an annual limitation on the utilization of net operating loss carryforwards related to acquired corporations based on a statutory rate of return (usually the “applicable federal funds rate” as defined in the Internal Revenue Code) and the value of the corporation at the time of a “change in ownership” as defined by Section 382. The Company’s total federal NOL as of December 31, 2017 includes $0.6 million of NOLs from acquired corporations. These acquired NOLs have an annual limitation under Section 382 of the Internal Revenue Code of $0.2 million.

As of December 31, 2017, the Company had NOLs in France, Italy, Chile, Germany, South Africa, Japan, and Switzerland of $8.9 million, $0.4 million, $1.3 million, $0.8 million, $0.2 million$0.3 million, and $0.3 million, respectively, which have an indefinite carryover period.

A reserve for an uncertain tax position was recorded during 2015 as a result of certain intercompany charges and expenses. During 2016, a reserve for an uncertain tax position was recorded as a result of a sale of intellectual property between the Company's subsidiaries. The following table summarizes the Company's uncertain tax positions (in thousands):

	Uncertain tax positions
	(as restated)
Balance at December 31, 2016	$	517
Additions based on tax positions related to the current year	—
Subtractions based on tax positions related to the current year	(35		)
Interest and penalties	17
Balance at December 31, 2017	$	499

As of December 31, 2017, the Company had gross state research and development credit carryforwards of approximately $0.3 million. The carryovers began to expire in 2016.

The Company's intention is to indefinitely reinvest all undistributed earnings of its foreign subsidiaries in accordance with ASC 740. Deferred income taxes were not calculated on undistributed earnings (deficit) of foreign subsidiaries, which were $59.0 million and $34.5 million at December 31, 2017 and 2016, respectively. Determination of the amount of unrecognized deferred tax liability on the undistributed earnings considered indefinitely reinvested is not practicable.

The Company's income (loss) before taxes for its foreign operations was $14.4 million, $13.1 million and $(29.8) million for the years ended December 31, 2017, 2016 and 2015, respectively. 

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. As of the date of enactment, we have adjusted our deferred tax assets and liabilities for our new statutory rate which resulted in a $5.1 million credit to our income tax provision for the year ended December 31, 2017. In addition, we have estimated and recorded a provisional expense of $5.3 million for transition tax related to our foreign operations.

We continue to evaluate the impacts of the Act and will consider additional guidance from the U.S. Treasury Department, IRS or other standard-setting bodies. Further adjustments, if any, will be recorded by us during the measurement period in 2018 as permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. 

We operate under a grant of income tax exemption in Puerto Rico, that became effective for certain operations occurring during the period ending December 31, 2017 and should remain in effect for 20 years as long as specific requirements are satisfied. The impact of this income tax exemption grant decreased foreign taxes by $0.4 million for 2017. The benefit of the tax exemption on diluted earnings per share was less than $0.01.

XML

Fair Value Measurement

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

ASC 820, Fair Value Measurement ("ASC 820") includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions.

The fair value hierarchy consists of the following three levels:

• Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.

• Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data.

• Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

As of December 31, 2017 the Company no longer has any Level 3 assets or liabilities remaining on its condensed consolidated financial statements as a result of the finalization of the contingent consideration liabilities discussed in Note 3. As of December 31, 2016, the only Level 3 liabilities on the Company's financial statements related to its potential contingent consideration payments from acquisitions occurring subsequent to January 1, 2009. The fair value of the liabilities determined by this analysis was primarily driven by the probability of reaching the performance measures required by the applicable purchase agreements and the associated discount rates. Probabilities were estimated by reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. If an acquisition reached the required performance measure, the estimated probability would be increased to 100% and reclassified to due to seller, and if the measure was not reached, the probability would have been reduced to reflect the amount earned, if any, depending on the terms of the agreement. Discount rates were determined by applying a risk premium to a risk-free interest rate.

The following tables set forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at December 31, 2016 (in thousands): 

At December 31, 2016	Total Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs  (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent consideration	$	19,283	$	—	$	—	$	19,283

The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):

	Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3)
	Contingent Consideration
Balance at December 31, 2015	$	22,162
Contingent consideration payments paid in cash	(11,374		)
Contingent consideration payments paid in stock	(2,012		)
Change in fair value(1)	10,417
Reclass to Due to seller	402
Foreign exchange impact(2)	(312		)
Balance at December 31, 2016	19,283
Contingent consideration payments paid in cash	(15,345		)
Contingent consideration payments paid in stock	(4,678		)
Change in fair value(1)	677
Foreign exchange impact(2)	63
Balance at December 31, 2017	$	—

(1) Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements, see note 3. These changes are recognized within operating expenses on the consolidated statements of operations.

(2) Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income.

XML

Earnings Per Share

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

Earnings (Loss) Per Share

Basic earnings (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average shares outstanding assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock and restricted stock units were settled for common shares during the period. In addition, dilutive shares would include any shares issuable related to PSUs for which the performance conditions have been met as of the end of the period. For the years ended December 31, 2017, 2016 and 2015, respectively, 1.1 million, 3.8 million and 3.2 million options and restricted common shares were excluded from the calculation as these options and restricted common shares were anti-dilutive.

The computation of basic and diluted earnings (loss) per common share for the years ended December 31, 2017, 2016 and 2015, is as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Numerator:
Net income (loss)	$	16,430	$	3,949	$	(32,389	)
Denominator:
Denominator for basic earnings (loss) per share—weighted-average shares outstanding	53,851		53,607		52,791
Effect of dilutive securities:
Employee stock options and restricted common shares	1,093		728		—
Contingently issuable shares	—		125		—
Denominator for diluted earnings (loss) per share	54,944		54,460		52,791
Basic earnings (loss) per share	$	0.31	$	0.07	$	(0.61	)
Diluted earnings (loss) per share	$	0.30	$	0.07	$	(0.61	)

XML

Share Repurchase Program

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Share Repurchase Program

Share Repurchase Program

On February 12, 2015, the Company announced that its Board of Directors approved a share repurchase program authorizing the repurchase of up to an aggregate of $20 million of its common stock through open market and privately negotiated transactions over a two-year period. On November 2, 2016, the Board of Directors approved a two-year extension to the share repurchase program through February 28, 2019. On May 4, 2017, the Board of Directors authorized the repurchase of up to an additional $30.0 million of its common stock through open market and privately negotiated transactions over a two-year period ending May 31, 2019. The timing and amount of any share repurchases will be determined based on market conditions, share price, and other factors and the program may be discontinued or suspended at any time. Repurchases will be made in compliance with SEC rules and other legal requirements. 

During the year ended December 31, 2017, the Company repurchased 1,121,928 shares of its common stock for an aggregate amount of $11.0 million at an average cost of $9.78 per share. During the year ended December 31, 2016, the Company did not repurchase any shares of its common stock under this program. Shares repurchased under this program are recorded at acquisition cost, including related expenses.

XML

Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Plans

Stock-Based Compensation Plans

In 2006, the Company adopted the 2006 Stock Incentive Plan (the "Plan"). Upon adoption, all previously existing plans were merged into the Plan and ceased to separately exist. The Plan was amended and restated effective June 2016 resulting in an increase in the maximum number of shares of common stock that may be issued under the Plan by 2,900,000, from 7,850,000 to 10,750,000. The Company’s policy is to issue shares resulting from the exercise of stock options, issuance of performance stock units and conversion of restricted stock as new shares.

The Company recorded share-based stock compensation expense of $6.8 million, $5.6 million and $5.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. As discussed in Note 2 Recent Accounting Pronouncements, the Company adopted ASU 2016-09 and for the year ended December 31, 2017 began recognizing forfeitures as they occurred. The 2016 and 2015 stock-based compensation expense is recorded net of an estimated forfeiture rate and adjusted to reflect actual forfeiture activity. The estimated forfeiture rates applied as of December 31, 2016 ranged from 7.0% to 8.0% for various types of employees. The Company recorded $0.9 million and $1.0 million of additional stock-based compensation expense for the years ended December 31, 2016 and 2015, respectively, for awards vested which exceeded the expense recorded using the estimated forfeiture rate.

Stock Options

Eligible employees receive non-qualified stock options as a portion of their total compensation. The options vest over various time periods depending upon the grant, but generally vest ratably over a four year service period. Vested options may be exercised and converted to one share of the Company’s common stock in exchange for the exercise price which is generally equal to the closing share price on the grant date. Compensation expense is measured by determining the fair value of each award using the Black-Scholes option valuation model. The fair value is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award. The stock-based compensation expense related to stock options for the years ended December 31, 2017, 2016 and 2015 was $2.9 million, $2.3 million and $2.4 million, respectively.

A summary of stock option activity for the years ended December 31, 2017, 2016 and 2015 is as follows (in thousands, except per share amounts):

	Outstanding Options		Weighted- Average  Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2014	4,046		$	8.35	$	4,725
Granted	975		6.87		—
Exercised	(405	)	2.95		1,604
Forfeited	(556	)	9.58		—
Outstanding at December 31, 2015	4,060		8.37		2,760
Granted	1,348		8.15		—
Exercised	(420	)	6.27		4,455
Forfeited	(227	)	10.20		—
Outstanding at December 31, 2016	4,761		8.40		8,655
Granted	568		10.73		—
Exercised	(428	)	7.85		1,300
Forfeited	(467	)	10.39		539
Outstanding at December 31, 2017	4,434		$	8.57	$	9,340
Options vested and exercisable at December 31, 2017	2,505		$	8.62	$	5,860

The Company’s stock options have a maximum term of 10 years from the date of grant. The weighted average remaining contractual life for options outstanding and options vested and exerciseable at December 31, 2017 is 5.70 and 3.68 years, respectively.

The weighted-average fair values and ranges of exercise prices for stock options granted during the years ended December 31, 2017, 2016 and 2015, which vest ratably over four or five years, are as follows (in thousands, except per share amounts):

	Options Granted	Weighted-Average Fair Value		Exercise Prices
2015	975	$	3.39	$6.21 - $8.20
2016	1,348	$	3.38	$6.99 - $9.20
2017	568	$	4.42	$9.32 - $11.47

The number of vested options totaled 2.5 million, 2.5 million and 2.5 million as of December 31, 2017, 2016 and 2015, respectively.

The aggregate intrinsic value of options outstanding and exercisable represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of each fiscal year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options in 2017, 2016 and 2015, respectively. These amounts change based on the fair market value of the Company’s stock which was $10.03, $9.98 and $7.50 on the last business day of the years ended December 31, 2017, 2016 and 2015, respectively.

The following assumptions were utilized in the Black-Scholes valuation model for options granted in 2017, 2016 and 2015:

	2017	2016	2015
Dividend yield	—	—	—
Risk-free interest rate	1.98%-2.34%	1.53%-2.03%	1.92%-2.12%
Expected life	6.5 years	6.5 years	6 years
Volatility	36.0%-38.0%	38.0%-50.0%	50.0	%

No dividend yield is used as the Company does not currently, nor historically, pay dividends. The risk-free interest rate is based on actual U.S. Treasury zero-coupon rates for bonds commensurate with the expected term. Expected term is estimated based on historical experience related to similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The Company believes that its historical experience provides the best estimate of future expected life. The expected volatility assumption is based on the historical volatility of the Company’s common stock over a period commensurate with the expected term.

There was $5.0 million, $7.4 million and $5.6 million of unrecognized compensation costs related to the stock options granted under the Plan as of December 31, 2017, 2016 and 2015, respectively. This cost is expected to be recognized over a weighted average period of 2.4, 3.6 and 2.8 years, respectively.

The following table summarizes information about all stock options outstanding for the Company as of December 31, 2017 (share amounts in thousands): 

Options Outstanding					Options Vested
Exercise Price	Number Outstanding	Weighted-Average Life Remaining (Years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0.00 - $4.36	64	1.29	$	3.11	64	$	3.11
$4.37 - $7.95	2,189	5.23	$	6.68	1,320	$	6.43
$7.96 - $11.97	1,613	7.50	$	9.55	552	$	9.32
$11.98 - $15.05	568	2.94	$	13.65	568	$	13.65
	4,434	5.70	$	8.57	2,505	$	8.62

Restricted Common Shares

Eligible employees receive restricted common shares as a portion of their total compensation. The restricted common shares vest over various time periods depending upon the grant, but generally vest from one to five years and convert to common stock at the conclusion of the vesting period. The Company measures the compensation cost based on the closing market price of the Company’s common stock at the grant date. The stock-based compensation expense related to restricted common shares for the years ended December 31, 2017, 2016 and 2015 was $3.5 million, $3.3 million and $3.5 million, respectively.

A summary of restricted share activity is as follows (in thousands, except per share amounts):

	Outstanding  Restricted Common Shares		Weighted- Average Grant- Date Fair Value
Nonvested Restricted Common shares at December 31, 2014	1,090		$	8.92
Granted	688		6.90
Vested and transferred to unrestricted common stock	(465	)	8.40
Forfeited	(356	)	8.19
Nonvested Restricted Common shares at December 31, 2015	957		7.66
Granted	559		8.24
Vested and transferred to unrestricted common stock	(429	)	7.71
Forfeited	(78	)	8.04
Nonvested Restricted Common shares at December 31, 2016	1,009		7.92
Granted	332		11.00
Vested and transferred to unrestricted common stock	(403	)	8.28
Forfeited	(166	)	8.51
Nonvested Restricted Common shares at December 31, 2017	772		$	8.98

There were $5.1 million, $7.6 million and $6.9 million of total unrecognized compensation costs related to the restricted common shares as of December 31, 2017, 2016 and 2015, respectively. This cost is expected to be recognized over a weighted average period of 2.5, 2.6 and 2.7 years, as of December 31, 2017, 2016 and 2015, respectively.

Performance-Based Restricted Stock Units:

During fiscal 2017, the Company granted a performance-based restricted stock unit award to the Company's executive officers. The performance-based restricted stock unit awards are subject to vesting based on a performance-based condition and a service-based condition. At the end of the three-year service period, based on the cumulative adjusted earnings per share and the return on invested capital achieved by the Company between April 1, 2017 and December 31, 2019 as approved by the Compensation Committee, these performance-based restricted stock units will vest in a percentage of the target number of shares between 0 and 200%, depending on the extent the performance condition is achieved. Each of the units granted represent the right to receive one share of the Company’s common stock at a specified future date. As of December 31, 2017, the number of common shares issuable upon vesting of these PSUs could range from zero to 256,465 shares.

	Outstanding  Performance Share Units		Weighted- Average Grant- Date Fair Value
Nonvested Performance Share Units at December 31, 2016	—		$	—
Granted	151,822		11.10
Forfeited	(23,588	)	11.10
Nonvested Performance Share Units at December 31, 2017	128,234		$	11.10

Compensation expense for PSUs is subject to adjustment based on management's assessment of the Company's performance relative to the target number of shares performance criteria.The stock-based compensation expense related to restricted common shares for the year ended December 31, 2017 was $0.4 million. There was $1.4 million of total unrecognized compensation costs related to the performance-based restricted stock units as of December 31, 2017 that is expected to be recognized over the remaining 2.0 years.

XML

Benefit Plans

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

Benefit Plans

Benefit Plans

The Company adopted a 401(k) savings plan effective February 1, 2005, covering all of the Company’s employees upon completion of 30 days of service. Employees may contribute a percentage of eligible compensation on both a before-tax basis and after-tax basis. The Company has the right to make discretionary contributions to the plan. For the years ended December 31, 2017, 2016 and 2015, total costs incurred from the Company’s contributions to the 401(k) plan were $1.0 million, $1.0 million and $1.0 million, respectively.

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Agreements and Services with Related Parties

The Company provides print procurement services to Arthur J. Gallagher & Company. J. Patrick Gallagher, Jr., a member of the Company’s Board of Directors, is the Chairman, President and Chief Executive Officer of Arthur J. Gallagher & Company and has a direct ownership interest in Arthur J. Gallagher & Company. The total amount billed for such procurement services during the years ended December 31, 2017, 2016 and 2015 was $1.9 million, $1.9 million and $1.7 million, respectively. Additionally, Arthur J. Gallagher & Company provides insurance brokerage and risk management services to the Company. As consideration for these services, Arthur J. Gallagher & Company billed the Company $0.1 million, $0.2 million and $0.6 million for the years ended December 31, 2017, 2016 and 2015, respectively. The amounts receivable from Arthur J. Gallagher & Company was $0.2 million and $0.4 million as of December 31, 2017 and 2016, respectively.

In the fourth quarter of 2017 the Company began providing marketing execution services to Enova International, Inc. David Fisher, a member of the Company’s Board of Directors, is the Chairman and Chief Executive Officer of Enova International, Inc. and has a direct ownership interest in Enova International, Inc. The total amount billed for such procurement services during the year ended December 31, 2017 is $0.1 million. The amounts receivable from Enova, Inc. was $0.1 million as of December 31, 2017.

XML

Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2017

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

Supplemental cash flow information is as follows (in thousands):

	Year Ended December 31,
	2017		2016		2015
Cash paid for:
Interest	$	4,072	$	4,338	$	4,306
Income taxes	9,838		5,485		3,863
	$	13,910	$	9,823	$	8,169
Noncash investing and financing activities:
Repurchases of common stock (as restated)	$	91	$	—	$	—
Shares issued as payment of contingent consideration	4,678		2,012		1,570
	$	4,769	$	2,012	$	1,570

XML

Business Segments

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Business Segments

Business Segments

Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results and makes key operating decisions. The Company is organized and managed as two business segments: North America and International. The North America segment includes operations in the United States and Canada; the International segment includes all other operations across Europe, Asia, Mexico, Central America and South America; Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses. All transactions between segments are presented at their gross amounts and eliminated through Other.

Management evaluates the performance of its operating segments based on net revenues and Adjusted EBITDA, which is a non-U.S. GAAP financial measure. The accounting policies of each of the operating segments are the same as those described in the summary of significant accounting policies in Note 2. Adjusted EBITDA represents income from operations excluding depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities and other items as described below. Management does not evaluate the performance of its operating segments using asset measures. The identifiable assets by segment disclosed in this note are those assets specifically identifiable within each segment and include cash, accounts receivable, inventory, goodwill and intangible assets. Shared service assets are primarily comprised of short-term investments, capitalized internal-use software and net property and equipment for the corporate headquarters. 

The table below presents financial information for our reportable operating segments and Other for the fiscal years noted (in thousands): 

	North America		International		Other (2)			Total
Fiscal 2017 (as restated):
Revenue from third parties	$	780,511	$	357,850	$	—		$	1,138,361
Revenue from other segments	5,469		15,137		(20,606		)	—
Total revenue	785,980		372,987		(20,606		)	1,138,361
Adjusted EBITDA(1)	74,230		19,520		(35,867		)	57,883
Fiscal 2016 (as restated):
Revenue from third parties	736,140		358,262		—			1,094,402
Revenue from other segments	6,029		17,526		(23,555		)	—
Total revenue	742,169		375,788		(23,555		)	1,094,402
Adjusted EBITDA(1)	68,434		21,570		(31,392		)	58,612
Fiscal 2015 (as revised):
Revenue from third parties	708,071		320,821		—			1,028,892
Revenue from other segments	7		8,691		(8,698		)	—
Total revenue	708,078		329,512		(8,698		)	1,028,892
Adjusted EBITDA(1)	63,436		15,124		(27,881		)	50,679

(1) Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill and intangible asset impairment charges, restructuring and other charges, secured assets reserves, professional fees related to ASC 606 implementation, business development realignment, CEO search costs, and Czech currency impact on procurement margin is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies.

(2) Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses.

The table below reconciles Adjusted EBITDA and Income (loss) before income taxes in our Consolidated statement of operations (in thousands):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Adjusted EBITDA	$	57,883	$	58,612	$	50,679
Depreciation and amortization	13,390		17,916		17,472
Stock-based compensation	6,820		5,572		5,873
Change in fair value of contingent consideration	677		10,417		(270		)
Goodwill impairment charge	—		—		37,539
Intangible asset impairment charges	—		70		202
Restructuring and other charges	—		5,615		1,053
Business development realignment	715		—		—
Professional fees related to ASC 606 implementation	829		—		—
CEO search costs	454		—		—
Czech currency impact on procurement margin	860		—		—
Secured asset reserve(1)	—		—		2,023
Total other expense	6,420		4,239		7,678
Income (loss) before income taxes	$	27,718	$	14,783	$	(20,891	)

(1) The Company accrued a reserve of $2.0 million in 2015, respectively, on inventory in which it holds a security interest. The inventory was procured for a former client.

The table below presents total assets for the Company's reportable segments and Other as of December 31, 2017 and December 31, 2016.

	December 31,
	2017		2016
	(as restated)		(as restated)
North America	$	401,415	$	370,403
International	228,321		203,238
Other	19,902		20,346
Total Assets	$	649,638	$	593,987

The Company had long-lived assets, consisting of net property and equipment, in the United States of $21.8 million, $21.2 million at December 31, 2017 and 2016, respectively. Long-lived assets in foreign countries were $14.9 million and $11.4 million at December 31, 2017 and 2016, respectively. 

The Company does not record revenue for financial reporting purposes by product and service category and therefore, it is impracticable for the Company to report revenue in such manner.

XML

Quarterly Financial Data (Unaudited) (Notes)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

Quarterly Financial Data (Unaudited)

The tables below are a condensed summary of the Company’s unaudited quarterly statements of income and quarterly earnings per share data for the years ended December 31, 2016 and 2017 (in thousands). The tables have been restated to correct for the items described in Note 20.  See Notes 20 and 21 for additional information and reconciliations from the amounts as originally reported to the applicable restated amounts:

	Year Ended December 31, 2017
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(as restated)		(as restated)		(as restated)		(as restated)
Revenue	$	264,405	$	280,066	$	288,523	$	305,367
Gross profit	64,704		70,046		71,921		68,787
Net income	5,678		4,374		7,116		(738		)
Net income per share:
Basic	$	0.11	$	0.08	$	0.13	$	(0.01	)
Diluted	$	0.10	$	0.08	$	0.13	$	(0.01	)

	Year Ended December 31, 2016
	First Quarter			Second Quarter			Third Quarter		Fourth Quarter
	(as restated)			(as restated)			(as restated)		(as restated)
Revenue	$	270,461		$	272,212		$	276,002	$	275,727
Gross profit	61,526			65,980			66,581		68,477
Net income (loss)	(3,136		)	(1,905		)	4,225		4,765
Net income (loss) per share:
Basic	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09
Diluted	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09

XML

Restatement and Revision of Prior Period Financial Statements (Notes)

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Restatement of Prior Period Financial Statements

Restatement and Revision of Prior Period Financial Statements

Subsequent to the original issuance of its financial statements, the Company identified certain errors in its historical annual consolidated financial statements, primarily related to the timing of the recognition of (i) revenue recognition for goods shipped and services performed and (ii) cost of goods sold for certain orders that were not recorded in the period in which the end product was sold to the customer and revenue was recognized. Accordingly, we have restated the financial statements for the years ended December 31, 2017 and 2016 to correct for the identified misstatements.

This Note 20 to the Company’s financial statements discloses the impact on the restated financial statements for the years ended December 31, 2017 and 2016 and the nature and derivation of the associated adjustments. The impact of the Restatement on interim periods in 2017 and 2016 is described in Note 21 (unaudited). The corrections included in the financial statements contained herein are further described below.

Our restated financial statements correct our accounting for recording a portion of costs of goods sold in the incorrect periods, which resulted in a material impact on net income and earnings per share, and have no material impact on our cash flow or liquidity. In addition to the correction of the errors discussed above, the Company has voluntarily made other immaterial corrections in all periods presented. Such immaterial corrections reflected in the Restated and Revised Periods and, together with the other corrections described above, are referred to herein as “Adjustments.”

The corrections included in these financial statements contained herein, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.

Impact of Restatement

The effect of the Restatement for the fiscal years ended December 31, 2017 and 2016 are summarized below. The primary errors corrected by the Restatement are as follows:

(a) Accrued accounts payable - The Company identified an error in a report that was used to support the reconciliation of accrued accounts payable. Correction of this error, when including rollover effect from the immediately preceding prior period, increased cost of goods sold by $2.2 million for the year ended December 31, 2017 and did not materially impact cost of goods sold for the year ended December 31, 2016; and increased accounts payable by $3.0 million and $0.8 million as of December 31, 2017 and 2016, respectively.

(b) FOB destination contracts - During review of the Company’s contracts with its customers, it identified certain contracts with terms indicating that the Company maintains risk of loss on its products until they arrive at the customer’s location. Revenue under these contracts had been recognized at the time of shipment but should have been deferred until delivery. Correction of this error, when including the rollover effect from the immediately preceding period, increased revenue by $3.4 million and $2.7 million for the years ended December 31, 2017 and 2016, respectively; increased cost of goods sold by $2.8 million and $2.1 million for the years ended December 31, 2017 and 2016, respectively; increased inventory by $2.3 million and $3.3 million as of December 31, 2017 and 2016, respectively; increased accounts payable $1.8 million as of December 31, 2017; and did not materially impact unbilled revenue as of December 31, 2017 and decreased unbilled revenue by $1.8 million as of December 31, 2016.

(c) Customer-owned inventory - The Company provides warehousing services to certain of its customers for marketing materials that have been purchased from the Company. At the customer’s request, products are stored at one of the Company’s warehouses until requested to be fulfilled to a customer location. In some cases, the contract with the customer requires payment for the products at the time of delivery to the Company’s warehouse where they are made available for fulfillment at which time it is designated as customer-owned inventory. The Company determined that this customer-owned inventory does not meet all revenue recognition requirements under GAAP at the time of delivery to the Company’s warehouse and should be deferred until it is shipped to the customer. Correction of this error increased deferred revenue by $4.1 million and $4.3 million as of December 31, 2017 and 2016, respectively; and increased inventory by $3.3 million and $3.6 million as of December 31, 2017 and 2016, respectively; and when including the rollover effect from the immediately preceding period did not have a material impact on the consolidated statements of operations for the years ended December 31, 2017 and 2016.

(d) Unbilled revenue - The Company identified revenue from certain customer orders that was earned but not invoiced in 2017 and was not identified in the financial close process. Correction of this error, when including the rollover effect from the immediately preceding periods, increased revenue by $1.0 million in 2017 and did not have a material impact in 2016; increased accounts payable by $1.3 million and $0.9 million as of December 31, 2017 and 2016, respectively; and increased unbilled revenue by $2.1 million and $1.0 million as of December 31, 2017 and 2016.

(e) Selling, general and administrative - The adjustment to selling, general and administrative expenses primarily related to the impact of the error corrections on the associated commissions and bonuses.

The corrections summarized below include consideration of the income tax effect on the adjustments. The following schedules reconcile the amounts as originally reported in the applicable financial statement to the corresponding restated amounts. For a description of certain adjustments contained in the tables below see the corresponding disclosures labeled (a) through (e) above.

Restated condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments				As Restated
Year Ended December 31, 2017:
Revenue	$	1,136,256	$	2,105		(b)(c)(d)	$	1,138,361
Cost of goods sold	857,921		4,982			(a)(b)(c)	862,903
Gross profit	278,335		(2,877		)		275,458
Selling, general and administrative	225,738		1,515			(e)	227,253
Income from operations	38,530		(4,392		)		34,138
Income before taxes	32,110		(4,392		)		27,718
Income tax expense	13,131		(1,843		)	*	11,288
Net income	18,979		(2,549		)		16,430
Basic earnings per share	$	0.35	$	(0.04	)		$	0.31
Diluted earnings per share	$	0.35	$	(0.05	)		$	0.30
Year Ended December 31, 2016:
Revenue	$	1,090,704	$	3,698		(b)(c)	$	1,094,402
Cost of goods sold	827,156		4,682			(b)(c)	831,838
Gross profit	263,548		(984		)		262,564
Selling, general and administrative	209,967		(443		)	(e)	209,524
Income from operations	19,563		(541		)		19,022
Income before taxes	15,325		(542		)		14,783
Income tax expense	10,955		(121		)	*	10,834
Net income	4,370		(421		)		3,949
Basic earnings per share	$	0.08	$	(0.01	)		$	0.07
Diluted earnings per share	$	0.08	$	(0.01	)		$	0.07

* The adjustment to income tax expense for the years ended December 31, 2017 and 2016 primarily relates to the tax effect of the adjustments summarized above.

Restated condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported			Adjustments			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Comprehensive income	20,697			(2,547		)	18,150
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Comprehensive loss	(2,436		)	(762		)	(3,198		)

Restated condensed consolidated balance sheet amounts (in thousands)

	As Previously Reported			Adjustments				As Restated
As of December 31, 2017:
Accounts receivable	$	206,712		$	(1,326	)		$	205,386
Unbilled revenue	49,389			627			(d)	50,016
Inventories	34,807			5,887			(b)(c)	40,694
Prepaid expenses	19,638			(1,073		)		18,565
Other current assets	32,694			5,171			**	37,865
Total current assets	373,802			9,286				383,088
Deferred income taxes	612			79				691
Other non-current assets	1,382			254				1,636
Total intangibles and other assets	229,503			333				229,836
Total assets	640,019			9,619				649,638
Accounts payable	$	134,609		$	6,555		(a)(b)(d)	$	141,164
Accrued expenses	33,694			697				34,391
Other current liabilities	20,956			3,122			**	24,078
Deferred revenue	13,685			3,935			(c)	17,620
Total current liabilities	202,943			14,310				217,253
Deferred income taxes	12,348			(305		)		12,043
Other long-term liabilities	6,771			628				7,399
Total liabilities	350,461			14,632				365,093
Accumulated other comprehensive loss	$	(19,079	)	$	(150	)		$	(19,229	)
Retained earnings	129,305			(4,863		)		124,442
Total stockholders' equity	289,559			(5,014		)		284,545
Total liabilities and stockholders' equity	640,019			9,619				649,638
As of December 31, 2016:
Accounts receivable	$	182,874		$	(410	)		$	182,464
Unbilled revenue	32,723			(1,207		)	(b)(d)	31,516
Inventories	31,638			4,810			(b)(c)	36,448
Prepaid expenses	18,772			(313		)		18,459
Other current assets	24,769			(172		)		24,597
Total current assets	321,700			2,708				324,408
Other non-current assets	1,374			280				1,654
Total intangibles and other assets	236,642			280				236,923
Total assets	590,999			2,988				593,987
Accounts payable	$	121,289		$	1,723		(a)(d)	$	123,012
Accrued expenses	30,068			(313		)		29,755
Other current liabilities	22,971			(395		)		22,576
Deferred revenue	12,078			4,324			(c)	16,402
Total current liabilities	205,688			5,340				211,028
Deferred income taxes	11,291			(525		)		10,766
Other long-term liabilities	1,926			638				2,564
Total liabilities	326,373			5,453				331,826

Accumulated other comprehensive loss	$	(20,799	)	$	(150	)	$	(20,949	)
Retained earnings	110,397			(2,315		)	108,082
Total stockholders' equity	264,626			(2,465		)	262,161
Total liabilities and stockholders' equity	590,999			2,988			593,987

** The changes in Other current assets and Other current liabilities as of December 31, 2017 primarily relate to netting adjustments to income tax accounts.

Restated condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported			Adjustments***			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Deferred income taxes	3,744			328			4,072
Accounts receivable and unbilled revenue	(40,959		)	(918		)	(41,877		)
Inventories	(3,169		)	(1,076		)	(4,245		)
Prepaid expenses and other assets	(8,989		)	(4,558		)	(13,547		)
Accounts payable	13,320			4,832			18,152
Accrued expenses and other liabilities	11,670			3,850			15,520
Net cash provided by operating activities	16,147			(91		)	16,056
Repurchases of common stock	$	(10,976	)	$	91		$	(10,885	)
Net cash used in financing activities	(4,972		)	91			(4,881		)
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Deferred income taxes	4,084			142			4,226
Accounts receivable and unbilled revenue	1,809			(4,460		)	(2,651		)
Inventories	1,690			4,665			6,355
Prepaid expenses and other assets	2,442			(10,648		)	(8,206		)
Accounts payable	(48,955		)	10,547			(38,408		)
Accrued expenses and other liabilities	12,759			174			12,933
Net cash provided by operating activities	10,525			—			10,525

*** The adjustments within the statement of cash flows for the years ended December 31, 2017 and 2016 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

Impact of Revision

As discussed above, Company has decided to voluntarily correct the financial statements for the year ended December 31, 2015, for immaterial errors primarily related to the timing of the recognition of (i) revenue and (ii) cost of goods sold as well as reclassifications between certain working capital accounts. Additionally, immaterial error corrections related to periods prior to January 1, 2015 are reflected as adjustments to beginning retained earnings of $2.6 million and to beginning accumulated other comprehensive loss of $0.2 million for the year ended December 31, 2015.

Revised condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments		As Revised
Year Ended December 31, 2015:
Revenue	1,029,353		(461	)	1,028,892
Cost of goods sold	789,159		(297	)	788,862
Gross profit	240,194		(164	)	240,030
Selling, general and administrative	197,291		(44	)	197,247
Loss from operations	(13,093	)	(120	)	(13,213	)
Loss before taxes	(20,771	)	(120	)	(20,891	)
Income tax expense	12,292		(794	)	11,498
Net loss	(33,063	)	674		(32,389	)
Basic loss per share	(0.63	)	0.02		(0.61	)
Diluted loss per share	(0.63	)	0.02		(0.61	)

Revised condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported		Adjustments	As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674	(32,389	)
Comprehensive loss	(41,655	)	1,015	(40,640	)

Revised condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported		Adjustments^		As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674		(32,389	)
Bad debt provision	1,949		(264	)	1,685
Deferred income taxes	6,947		(1,068	)	5,879
Accounts receivable and unbilled revenue	(10,361	)	(219	)	(10,580	)
Inventories	(8,188	)	(1,488	)	(9,676	)
Prepaid expenses and other assets	(6,138	)	1,998		(4,140	)
Accounts payable	26,199		(1,097	)	25,102
Accrued expenses and other liabilities	2,118		1,464		3,582
Net cash provided by operating activities	43,402		—		43,402

^The adjustments within the statement of cash flows for the years ended December 31, 2017 and 2016 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

Restatement of Prior Period Quarterly Financial Statements (Unaudited)

As discussed in greater detail in Note 20 - Restatement and Revision of Prior Period Financial Statements, the Company determined to restate its previously issued unaudited condensed consolidated financial statements for the quarterly periods within the years ended December 31, 2017 and 2016. The following tables summarize the impacts of the results on our previously reported condensed statements of operations and balances sheets included in our Quarterly Reports on Form 10-Q for each respective period. Certain line items in the quarterly financial data below were excluded because they were not impacted by the Restatement.

Condensed consolidated statements of income (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Revenue	$	264,405		$	270,461
Cost of goods sold	199,701			208,935
Gross profit	64,704			61,526
Operating expenses:
Selling, general and administrative expenses	53,615			51,477
Depreciation and amortization	2,904			4,596
Change in fair value of contingent consideration	(1,040		)	1,911
Restructuring charges	—			3,344
Income (loss) from operations	9,225			198
Other income (expense):
Interest income	34			14
Interest expense	(1,003		)	(1,077		)
Other, net	(224		)	(161		)
Total other expense	(1,193		)	(1,224		)
Income (loss) before taxes	8,032			(1,026		)
Income tax expense	2,354			2,110
Net income (loss)	$	5,678		$	(3,136	)
Basic earnings (loss) per share	$	0.11		$	(0.06	)
Diluted earnings (loss) per share	$	0.10		$	(0.06	)
Comprehensive income (loss)	$	7,657		$	(3,411	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	280,066		$	272,212		$	544,471		$	542,673
Cost of goods sold	210,020			206,232			409,721			415,167
Gross profit	70,046			65,980			134,750			127,506
Operating expenses:
Selling, general and administrative expenses	55,054			51,622			108,669			103,099
Depreciation and amortization	3,182			4,720			6,086			9,316
Change in fair value of contingent consideration	1,884			7,276			844			9,187
Restructuring charges	—			623			—			3,967
Income from operations	9,926			1,739			19,151			1,937
Other income (expense):
Interest income	12			24			46			38
Interest expense	(1,038		)	(985		)	(2,041		)	(2,062		)
Other, net	(1,164		)	291			(1,388		)	130
Total other expense	(2,190		)	(670		)	(3,383		)	(1,894		)
Income before taxes	7,736			1,069			15,768			42
Income tax expense	3,362			2,974			5,716			5,084
Net income (loss)	$	4,374		$	(1,905	)	$	10,052		$	(5,043	)
Basic earnings (loss) per share	$	0.08		$	(0.04	)	$	0.19		$	(0.09	)
Diluted earnings (loss) per share	$	0.08		$	(0.04	)	$	0.18		$	(0.09	)
Comprehensive income (loss)	$	8,253		$	(3,295	)	$	15,911		$	(6,708	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	288,523		$	276,002		$	832,994		$	818,675
Cost of goods sold	216,602			209,421			626,323			624,588
Gross profit	71,921			66,581			206,671			194,087
Operating expenses:
Selling, general and administrative expenses	57,186			52,466			165,855			155,565
Depreciation and amortization	3,317			5,066			9,403			14,382
Change in fair value of contingent consideration	(167		)	788			677			9,975
Restructuring charges	—			465			—			4,433
Income from operations	11,585			7,796			30,736			9,732
Other income (expense):
Interest income	31			26			77			63
Interest expense	(1,198		)	(1,190		)	(3,239		)	(3,252		)
Other, net	426			(114		)	(962		)	16
Total other expense	(741		)	(1,279		)	(4,124		)	(3,173		)
Income before taxes	10,844			6,517			26,612			6,559
Income tax expense	3,728			2,292			9,444			7,376
Net income (loss)	$	7,116		$	4,225		$	17,168		$	(817	)
Basic earnings (loss) per share	$	0.13		$	0.08		$	0.32		$	(0.02	)
Diluted earnings (loss) per share	$	0.13		$	0.08		$	0.31		$	(0.02	)
Comprehensive income (loss)	$	9,284		$	4,024		$	25,196		$	(2,683	)

Quarterly financial data (unaudited)

	Three Months Ended December 31, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	270,418	$	5,309		$	275,727
Gross profit	68,727		(250		)	68,477
Net income	5,047		(282		)	4,765
Net income per share:
Basic	0.09		—			0.09
Diluted	0.09		—			0.09

	Three Months Ended December 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	300,950	$	4,417		$	305,367
Gross profit	71,311		(2,524		)	68,787
Net income (loss)	1,500		(2,238		)	(738		)
Net income (loss) per share:
Basic	0.03		(0.04		)	(0.01		)
Diluted	0.03		(0.04		)	(0.01		)

Condensed consolidated balance sheets (unaudited)

	March 31, 2017			June 30, 2017			September 30, 2017
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	29,920		$	23,537		$	27,682
Accounts receivable, net of allowance for doubtful accounts of $2,504, $2,466 and $2,692 respectively	184,713			206,242			200,799
Unbilled revenue	33,771			34,264			48,645
Inventories	36,674			34,558			54,174
Prepaid expenses	23,912			23,588			22,018
Other current assets	20,302			20,475			31,529
Total current assets	329,292			342,664			384,847
Property and equipment, net	34,000			36,030			37,212
Intangibles and other assets:
Goodwill	203,269			205,399			206,704
Intangible assets, net	30,452			29,699			28,745
Deferred income taxes	1,440			1,281			1,432
Other non-current assets	1,633			1,547			1,592
Total intangibles and other assets	236,794			237,926			238,473
Total assets	$	600,086		$	616,620		$	660,532
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	114,616			126,382			130,406
Current portion of contingent consideration	17,165			—			—
Due to seller	1,093			17,842			—
Other current liabilities	24,359			25,210			30,416
Deferred revenue	16,885			15,392			15,709
Accrued expenses	32,422			27,409			32,889
Total current liabilities	206,540			212,235			209,420
Revolving credit facility	113,691			118,658			149,184
Deferred income taxes	9,818			9,876			9,839
Other long-term liabilities	2,697			2,625			2,595
Total liabilities	332,746			343,394			371,038
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 63,438, 63,808 and 63,964 shares issued, 53,565, 53,500 and 53,037 shares outstanding, respectively	6			6			6
Additional paid-in capital	228,106			230,030			232,979
Treasury stock at cost, 9,872, 10,308 and 9,927 shares, respectively	(54,949		)	(59,224		)	(54,938		)
Accumulated other comprehensive loss	(18,970		)	(15,090		)	(12,922		)
Retained earnings	113,147			117,504			124,369
Total stockholders' equity	267,340			273,226			289,494
Total liabilities and stockholders' equity	$	600,086		$	616,620		$	660,532

	March 31, 2016			June 30, 2016			September 30, 2016
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	20,929		$	31,606		$	20,787
Accounts receivable, net of allowance for doubtful accounts of $1,759, $1,609 and $2,218, respectively	196,251			188,247			185,659
Unbilled revenue	32,457			29,202			37,982
Inventories	42,350			43,528			52,830
Prepaid expenses	12,524			11,712			11,551
Other current assets	16,699			17,738			31,302
Total current assets	321,210			322,033			340,111
Property and equipment, net	33,208			33,089			32,279
Intangibles and other assets:
Goodwill	206,069			204,897			204,978
Intangible assets, net	36,577			34,831			33,476
Deferred income taxes	788			882			1,123
Other non-current assets	1,469			1,415			1,426
Total intangibles and other assets	244,903			242,025			241,003
Total assets	$	599,321		$	597,148		$	613,393
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	129,894			139,914			129,869
Current portion of contingent consideration	11,131			3,862			19,320
Due to seller	3,604			8,527			1,683
Other current liabilities	24,401			24,200			25,760
Deferred revenue	14,589			15,180			13,409
Accrued expenses	23,939			16,096			20,788
Total current liabilities	207,558			207,779			210,829
Revolving credit facility	118,615			111,566			133,734
Deferred income taxes	9,652			11,061			10,622
Contingent consideration, net of current portion	9,188			14,699			—
Other long-term liabilities	3,129			2,995			2,591
Total liabilities	348,142			348,100			357,776
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 62,867, 63,086 and 63,274 shares issued, 53,321, 53,583 and 53,770 shares outstanding, respectively	6			6			6
Additional paid-in capital	215,723			216,540			219,085
Treasury stock at cost, 9,547, 9,503 and 9,504 shares, respectively	(52,207		)	(51,724		)	(51,724		)
Accumulated other comprehensive loss	(14,077		)	(15,467		)	(15,668		)
Retained earnings	101,734			99,693			103,918
Total stockholders' equity	251,179			249,048			255,617
Total liabilities and stockholders' equity	$	599,321		$	597,148		$	613,393

Condensed consolidated statements of cash flows (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	5,678		$	(3,136	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	2,904			4,596
Stock-based compensation expense	1,419			1,241
Deferred income taxes	478			(546		)
Change in fair value of contingent consideration liability	(1,040		)	1,911
Bad debt provision	175			656
Other operating activities	52			52
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(4,680		)	(15,863		)
Inventories	(226		)	453
Prepaid expenses and other assets	(1,167		)	5,968
Change in liabilities, net of acquisitions:
Accounts payable	(8,396		)	(31,526		)
Accrued expenses and other liabilities	4,923			11,627
Net cash used in operating activities	120			(24,566		)
Cash flows from investing activities
Purchases of property and equipment	(3,042		)	(3,987		)
Net cash used in investing activities	(3,042		)	(3,987		)
Cash flows from financing activities
Net borrowings of revolving credit facility	6,519			19,358
Net short-term secured repayments	(801		)	(1,803		)
Repurchases of common stock	(4,342		)	—
Payments of contingent consideration	—			(525		)
Proceeds from exercise of stock options	189			984
Other financing activities	(95		)	382
Net cash provided by in financing activities	1,470			18,396
Effect of exchange rate changes on cash and cash equivalents	448			331
Decrease in cash and cash equivalents	(1,004		)	(9,826		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	29,920		$	20,929

	Six Months Ended June 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	10,052		$	(5,043	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	6,086			9,316
Stock-based compensation expense	2,921			2,358
Deferred income taxes	624			557
Change in fair value of contingent consideration liability	844			9,187
Intangible asset impairment charges	—			789
Bad debt provision	82			—
Other operating activities	104			105
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(26,620		)	(4,738		)
Inventories	1,890			(725		)
Prepaid expenses and other assets	(971		)	5,742
Change in liabilities, net of acquisitions:
Accounts payable	3,370			(21,506		)
Accrued expenses and other liabilities	(69		)	3,110
Net cash used in operating activities	(1,687		)	(848		)
Cash flows from investing activities
Purchases of property and equipment	(7,024		)	(7,445		)
Net cash used in investing activities	(7,024		)	(7,445		)
Cash flows from financing activities
Net borrowings of revolving credit facility	11,491			12,553
Net short-term secured borrowings	37			104
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(2,089		)	(4,144		)
Proceeds from exercise of stock options	1,319			1,090
Other financing activities	(119		)	(474		)
Net cash provided by in financing activities	598			9,129
Effect of exchange rate changes on cash and cash equivalents	726			15
(Decrease) increase in cash and cash equivalents	(7,387		)	851
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	23,537			31,606

	Nine Months Ended September 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	17,168		$	(817	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	9,403			14,382
Stock-based compensation expense	5,296			4,097
Deferred income taxes	448			372
Change in fair value of contingent consideration liability	677			9,975
Bad debt provision	268			1,433
Other operating activities	157			156
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(35,732		)	(11,573		)
Inventories	(17,726		)	(10,027		)
Prepaid expenses and other assets	(10,567		)	(7,622		)
Change in liabilities, net of acquisitions:
Accounts payable	7,395			(31,551		)
Accrued expenses and other liabilities	10,830			7,543
Net cash used in operating activities	(12,383		)	(23,632		)
Cash flows from investing activities
Purchases of property and equipment	(10,274		)	(10,502		)
Net cash used in investing activities	(10,274		)	(10,502		)
Cash flows from financing activities
Net borrowings of revolving credit facility	42,258			34,722
Net short-term secured borrowings (repayments)	633			(820		)
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(15,345		)	(11,008		)
Proceeds from exercise of stock options	1,824			2,002
Other financing activities	(850		)	(680		)
Net cash provided by in financing activities	18,479			24,216
Effect of exchange rate changes on cash and cash equivalents	936			(50		)
Decrease in cash and cash equivalents	(3,242		)	(9,968		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	27,682		$	20,787

Restated and revised consolidated statements of income amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	267,390	$	(2,985	)	$	264,405
Cost of goods sold	203,113		(3,412		)	199,701
Gross profit	64,277		427			64,704
Selling, general and administrative expenses	53,427		188			53,615
Income from operations	8,986		239			9,225
Income before taxes	7,793		239			8,032
Income tax expense	2,337		17			2,354
Net income	5,456		222			5,678
Basic earnings per share	0.10		0.01			0.11
Diluted earnings per share	0.10		—			0.10
Comprehensive income	7,435		222			7,657

	Three Months Ended March 31, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	271,073		$	(612	)	$	270,461
Cost of goods sold	209,127			(192		)	208,935
Gross profit	61,946			(420		)	61,526
Selling, general and administrative expenses	51,492			(15		)	51,477
Income from operations	603			(405		)	198
Loss before taxes	(621		)	(405		)	(1,026		)
Income tax expense	2,072			38			2,110
Net loss	(2,693		)	(443		)	(3,136		)
Basic loss per share	(0.05		)	(0.01		)	(0.06		)
Diluted loss per share	(0.05		)	(0.01		)	(0.06		)
Comprehensive loss	(3,163		)	(248		)	(3,411		)

	Three Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,530	$	536		$	280,066
Cost of goods sold	209,303		717			210,020
Gross profit	70,227		(181		)	70,046
Selling, general and administrative expenses	55,086		(32		)	55,054
Income from operations	10,075		(149		)	9,926
Income before taxes	7,884		(149		)	7,736
Income tax expense	3,391		(29		)	3,362
Net income	4,493		(120		)	4,374
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	8,373		(120		)	8,253

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	546,920	$	(2,449	)	$	544,471
Cost of goods sold	412,416		(2,695		)	409,721
Gross profit	134,504		246			134,750
Selling, general and administrative expenses	108,513		156			108,669
Income from operations	19,061		90			19,151
Income before taxes	15,678		90			15,768
Income tax expense	5,727		(11		)	5,716
Net income	9,951		101			10,052
Basic earnings per share	0.19		—			0.19
Diluted earnings per share	0.18		—			0.18
Comprehensive income	15,810		101			15,911

	Three Months Ended June 30, 2016
	As Previously Reported			Adjustments		As Restated
Revenue	$	269,220		$	2,992	$	272,212
Cost of goods sold	204,126			2,106		206,232
Gross profit	65,093			886		65,980
Selling, general and administrative expenses	51,418			203		51,622
Income from operations	1,056			683		1,739
Income before taxes	386			683		1,069
Income tax expense	2,710			264		2,974
Net loss	(2,324		)	419		(1,905		)
Basic loss per share	(0.04		)	—		(0.04		)
Diluted loss per share	(0.04		)	—		(0.04		)
Comprehensive loss	(3,714		)	419		(3,295		)

	Six Months Ended June 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	540,292		$	2,381		$	542,673
Cost of goods sold	413,253			1,914			415,167
Gross profit	127,039			467			127,506
Selling, general and administrative expenses	102,910			189			103,099
Income from operations	1,659			278			1,937
Income (loss) before taxes	(235		)	277			42
Income tax expense	4,782			302			5,084
Net loss	(5,017		)	(26		)	(5,043		)
Basic loss per share	(0.09		)	—			(0.09		)
Diluted loss per share	(0.09		)	—			(0.09		)
Comprehensive loss	(6,877		)	169			(6,708		)

	Three Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	288,386	$	137		$	288,523
Cost of goods sold	215,867		735			216,602
Gross profit	72,519		(598		)	71,921
Selling, general and administrative expenses	57,134		52			57,186
Income from operations	12,236		(649		)	11,585
Income before taxes	11,495		(650		)	10,844
Income tax expense	3,967		(239		)	3,728
Net income	7,528		(411		)	7,116
Basic earnings per share	0.14		(0.01		)	0.13
Diluted earnings per share	0.14		(0.01		)	0.13
Comprehensive income	9,696		(411		)	9,284

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	835,306	$	(2,312	)	$	832,994
Cost of goods sold	628,282		(1,959		)	626,323
Gross profit	207,024		(353		)	206,671
Selling, general and administrative expenses	165,647		208			165,855
Income from operations	31,297		(561		)	30,736
Income before taxes	27,173		(562		)	26,612
Income tax expense	9,694		(250		)	9,444
Net income	17,479		(311		)	17,168
Basic earnings per share	0.32		—			0.32
Diluted earnings per share	0.32		(0.01		)	0.31
Comprehensive income	25,506		(311		)	25,196

	Three Months Ended September 30, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,993	$	(3,991	)	$	276,002
Cost of goods sold	212,212		(2,791		)	209,421
Gross profit	67,781		(1,200		)	66,581
Selling, general and administrative expenses	52,601		(135		)	52,466
Income from operations	8,860		(1,064		)	7,796
Income before taxes	7,581		(1,064		)	6,517
Income tax expense	3,240		(948		)	2,292
Net income	4,341		(116		)	4,225
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	4,140		(116		)	4,024

	Nine Months Ended September 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	820,286		$	(1,611	)	$	818,675
Cost of goods sold	625,465			(877		)	624,588
Gross profit	194,821			(734		)	194,087
Selling, general and administrative expenses	155,511			54			155,565
Income from operations	10,520			(788		)	9,732
Income before taxes	7,347			(788		)	6,559
Income tax expense	8,023			(647		)	7,376
Net loss	(676		)	(141		)	(817		)
Basic loss per share	(0.01		)	(0.01		)	(0.02		)
Diluted loss per share	(0.01		)	(0.01		)	(0.02		)
Comprehensive loss	(2,201		)	(482		)	(2,683		)

Restated and revised consolidated balance sheet amounts (unaudited)

	As of March 31, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	187,028		(2,315	)	184,713
Unbilled revenue	35,712		(1,941	)	33,771
Inventories	30,338		6,336		36,674
Other current assets	20,598		(296	)	20,302
Total current assets	327,508		1,784		329,292
Other non-current assets	1,353		280		1,633
Total other assets	236,514		280		236,794
Total assets	598,022		2,064		600,086
Accounts payable	114,399		217		114,616
Accrued expenses	32,547		(125	)	32,422
Other current liabilities	25,231		(872	)	24,359
Deferred revenue	12,405		4,480		16,885
Total current liabilities	202,840		3,700		206,540
Deferred income taxes	9,848		(30	)	9,818
Other long-term liabilities	2,060		637		2,697
Total liabilities	328,439		4,307		332,746
Accumulated other comprehensive loss	(18,820	)	(150	)	(18,970	)
Retained earnings	115,240		(2,093	)	113,147
Total stockholders' equity	269,583		(2,243	)	267,340
Total liabilities and stockholders' equity	598,022		2,064		600,086

	As of June 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	208,382		(2,140	)	206,242
Unbilled revenue	36,515		(2,251	)	34,264
Inventories	28,192		6,366		34,558
Other current assets	20,949		(474	)	20,475
Total current assets	341,163		1,501		342,664
Other non-current assets	1,267		280		1,547
Total intangibles and other assets	237,646		280		237,926
Total assets	614,839		1,781		616,620
Accounts payable	125,593		789		126,382
Accrued expenses	27,567		(158	)	27,409
Other current liabilities	26,163		(953	)	25,210
Deferred revenue	11,585		3,807		15,392
Total current liabilities	208,750		3,485		212,235
Deferred income taxes	9,852		24		9,876
Other long-term liabilities	1,988		637		2,625
Total liabilities	339,248		4,146		343,394
Accumulated other comprehensive loss	(14,940	)	(150	)	(15,090	)
Retained earnings	119,719		(2,215	)	117,504
Total stockholders' equity	275,591		(2,365	)	273,226
Total liabilities and stockholders' equity	614,839		1,781		616,620

	As of September 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	203,306		(2,507	)	200,799
Unbilled revenue	50,130		(1,485	)	48,645
Inventories	48,744		5,430		54,174
Other current assets	31,850		(321	)	31,529
Total current assets	383,730		1,117		384,847
Other non-current assets	1,312		280		1,592
Total intangibles and other assets	238,193		280		238,473
Total assets	659,135		1,397		660,532
Accounts payable	129,600		806		130,406
Accrued expenses	32,994		(105	)	32,889
Other current liabilities	31,589		(1,173	)	30,416
Deferred revenue	11,707		4,002		15,709
Total current liabilities	205,890		3,530		209,420
Deferred income taxes	9,834		5		9,839
Other long-term liabilities	1,958		637		2,595
Total liabilities	366,866		4,172		371,038
Accumulated other comprehensive loss	(12,772	)	(150	)	(12,922	)
Retained earnings	126,994		(2,625	)	124,369
Total stockholders' equity	292,269		(2,775	)	289,494
Total liabilities and stockholders' equity	659,135		1,397		660,532

	As of March 31, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	200,629		(4,378	)	196,251
Unbilled revenue	34,548		(2,091	)	32,457
Inventories	34,715		7,635		42,350
Prepaid expenses	12,957		(433	)	12,524
Other current assets	16,708		(8	)	16,699
Total current assets	320,485		725		321,210
Total assets	598,596		725		599,321
Accounts payable	130,048		(154	)	129,894
Accrued expenses	24,257		(318	)	23,939
Deferred revenue	10,975		3,614		14,589
Total current liabilities	204,416		3,142		207,558
Deferred income taxes	10,476		(824	)	9,652
Other long-term liabilities	2,772		358		3,129
Total liabilities	345,466		2,676		348,142
Accumulated other comprehensive loss	(14,463	)	386		(14,077	)
Retained earnings	104,071		(2,337	)	101,734
Total stockholders' equity	253,130		(1,951	)	251,179
Total liabilities and stockholders' equity	598,596		725		599,321

	As of June 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	193,297		(5,050	)	188,247
Unbilled revenue	27,857		1,345		29,202
Inventories	35,901		7,627		43,528
Prepaid expenses	12,145		(433	)	11,712
Other current assets	17,647		92		17,738
Total current assets	318,453		3,580		322,033
Total assets	593,567		3,582		597,148
Accounts payable	136,260		3,654		139,914
Accrued expenses	17,818		(1,722	)	16,096
Deferred revenue	11,793		3,387		15,180
Total current liabilities	202,460		5,319		207,779
Deferred income taxes	11,620		(559	)	11,061
Other long-term liabilities	2,639		356		2,995
Total liabilities	342,984		5,116		348,100
Accumulated other comprehensive loss	(15,853	)	386		(15,467	)
Retained earnings	101,614		(1,921	)	99,693
Total stockholders' equity	250,583		(1,535	)	249,048
Total liabilities and stockholders' equity	593,567		3,581		597,148

	As of September 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	190,438		(4,779	)	185,659
Unbilled revenue	40,505		(2,523	)	37,982
Inventories	45,377		7,453		52,830
Prepaid expenses	11,984		(433	)	11,551
Other current assets	30,528		774		31,302
Total current assets	339,619		492		340,111
Total assets	612,901		492		613,393
Accounts payable	129,980		(111	)	129,869
Accrued expenses	21,037		(249	)	20,788
Deferred revenue	9,755		3,654		13,409
Total current liabilities	207,535		3,294		210,829
Deferred income taxes	11,594		(972	)	10,622
Other long-term liabilities	2,235		356		2,591
Total liabilities	355,098		2,678		357,776
Accumulated other comprehensive loss	(15,518	)	(150	)	(15,668	)
Retained earnings	105,954		(2,036	)	103,918
Total stockholders' equity	257,803		(2,186	)	255,617
Total liabilities and stockholders' equity	612,901		492		613,393

Restated and revised consolidated statement of cash flow amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments		As Restated
Net income	5,456		222		5,678
Deferred income taxes	(16	)	494		478
Accounts receivable and unbilled revenue	(7,318	)	2,638		(4,680	)
Inventories	1,300		(1,526	)	(226	)
Prepaid expenses and other assets	(979	)	(188	)	(1,167	)
Accounts payable	(6,890	)	(1,506	)	(8,396	)
Accrued expenses and other liabilities	5,057		(134	)	4,923
Net cash provided by operating activities	120		—		120

	Three Months Ended March 31, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(2,693	)	(443	)	(3,136	)
Deferred income taxes	(389	)	(157	)	(546	)
Accounts receivable and unbilled revenue	(16,256	)	393		(15,863	)
Inventories	(1,388	)	1,841		453
Prepaid expenses and other assets	16,382		(10,414	)	5,968
Accounts payable	(40,196	)	8,670		(31,526	)
Accrued expenses and other liabilities	11,518		109		11,627
Net cash used in operating activities	(24,566	)	—		(24,566	)

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	9,951		101		10,052
Deferred income taxes	76		548		624
Accounts receivable and unbilled revenue	(29,395	)	2,775		(26,620	)
Inventories	3,446		(1,556	)	1,890
Prepaid expenses and other assets	(957	)	(14	)	(971	)
Accounts payable	4,304		(934	)	3,370
Accrued expenses and other liabilities	851		(920	)	(69	)
Net cash used in operating activities	(1,687	)	—		(1,687	)

	Six Months Ended June 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(5,017	)	(26	)	(5,043	)
Deferred income taxes	450		107		557
Accounts receivable and unbilled revenue	(2,366	)	(2,372	)	(4,738	)
Inventories	(2,573	)	1,848		(725	)
Prepaid expenses and other assets	16,255		(10,513	)	5,742
Accounts payable	(33,984	)	12,478		(21,506	)
Accrued expenses and other liabilities	4,632		(1,522	)	3,110
Net cash used in operating activities	(848	)	—		(848	)

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	17,479		(311	)	17,168
Deferred income taxes	(82	)	530		448
Accounts receivable and unbilled revenue	(38,108	)	2,376		(35,732	)
Inventories	(17,106	)	(620	)	(17,726	)
Prepaid expenses and other assets	(10,401	)	(166	)	(10,567	)
Accounts payable	8,312		(917	)	7,395
Accrued expenses and other liabilities	11,722		(891	)	10,830
Net cash used in operating activities	(12,383	)	—		(12,383	)

	Nine Months Ended September 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(676	)	(141	)	(817	)
Deferred income taxes	677		(305	)	372
Accounts receivable and unbilled revenue	(12,798	)	1,225		(11,573	)
Inventories	(12,050	)	2,023		(10,027	)
Prepaid expenses and other assets	3,574		(11,196	)	(7,622	)
Accounts payable	(40,264	)	8,713		(31,551	)
Accrued expenses and other liabilities	7,861		(318	)	7,543
Net cash used in operating activities	(23,632	)	—		(23,632	)

XML

Restatement and Revision of Prior Period Quarterly Financial Statements (Notes)

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Restatement of Prior Period Quarterly Financial Statements

Restatement and Revision of Prior Period Financial Statements

Subsequent to the original issuance of its financial statements, the Company identified certain errors in its historical annual consolidated financial statements, primarily related to the timing of the recognition of (i) revenue recognition for goods shipped and services performed and (ii) cost of goods sold for certain orders that were not recorded in the period in which the end product was sold to the customer and revenue was recognized. Accordingly, we have restated the financial statements for the years ended December 31, 2017 and 2016 to correct for the identified misstatements.

This Note 20 to the Company’s financial statements discloses the impact on the restated financial statements for the years ended December 31, 2017 and 2016 and the nature and derivation of the associated adjustments. The impact of the Restatement on interim periods in 2017 and 2016 is described in Note 21 (unaudited). The corrections included in the financial statements contained herein are further described below.

Our restated financial statements correct our accounting for recording a portion of costs of goods sold in the incorrect periods, which resulted in a material impact on net income and earnings per share, and have no material impact on our cash flow or liquidity. In addition to the correction of the errors discussed above, the Company has voluntarily made other immaterial corrections in all periods presented. Such immaterial corrections reflected in the Restated and Revised Periods and, together with the other corrections described above, are referred to herein as “Adjustments.”

The corrections included in these financial statements contained herein, which we refer to herein collectively as the “Restatement,” were prepared following an independent review by the Audit Committee of the Company’s Board of Directors.

Impact of Restatement

The effect of the Restatement for the fiscal years ended December 31, 2017 and 2016 are summarized below. The primary errors corrected by the Restatement are as follows:

(a) Accrued accounts payable - The Company identified an error in a report that was used to support the reconciliation of accrued accounts payable. Correction of this error, when including rollover effect from the immediately preceding prior period, increased cost of goods sold by $2.2 million for the year ended December 31, 2017 and did not materially impact cost of goods sold for the year ended December 31, 2016; and increased accounts payable by $3.0 million and $0.8 million as of December 31, 2017 and 2016, respectively.

(b) FOB destination contracts - During review of the Company’s contracts with its customers, it identified certain contracts with terms indicating that the Company maintains risk of loss on its products until they arrive at the customer’s location. Revenue under these contracts had been recognized at the time of shipment but should have been deferred until delivery. Correction of this error, when including the rollover effect from the immediately preceding period, increased revenue by $3.4 million and $2.7 million for the years ended December 31, 2017 and 2016, respectively; increased cost of goods sold by $2.8 million and $2.1 million for the years ended December 31, 2017 and 2016, respectively; increased inventory by $2.3 million and $3.3 million as of December 31, 2017 and 2016, respectively; increased accounts payable $1.8 million as of December 31, 2017; and did not materially impact unbilled revenue as of December 31, 2017 and decreased unbilled revenue by $1.8 million as of December 31, 2016.

(c) Customer-owned inventory - The Company provides warehousing services to certain of its customers for marketing materials that have been purchased from the Company. At the customer’s request, products are stored at one of the Company’s warehouses until requested to be fulfilled to a customer location. In some cases, the contract with the customer requires payment for the products at the time of delivery to the Company’s warehouse where they are made available for fulfillment at which time it is designated as customer-owned inventory. The Company determined that this customer-owned inventory does not meet all revenue recognition requirements under GAAP at the time of delivery to the Company’s warehouse and should be deferred until it is shipped to the customer. Correction of this error increased deferred revenue by $4.1 million and $4.3 million as of December 31, 2017 and 2016, respectively; and increased inventory by $3.3 million and $3.6 million as of December 31, 2017 and 2016, respectively; and when including the rollover effect from the immediately preceding period did not have a material impact on the consolidated statements of operations for the years ended December 31, 2017 and 2016.

(d) Unbilled revenue - The Company identified revenue from certain customer orders that was earned but not invoiced in 2017 and was not identified in the financial close process. Correction of this error, when including the rollover effect from the immediately preceding periods, increased revenue by $1.0 million in 2017 and did not have a material impact in 2016; increased accounts payable by $1.3 million and $0.9 million as of December 31, 2017 and 2016, respectively; and increased unbilled revenue by $2.1 million and $1.0 million as of December 31, 2017 and 2016.

(e) Selling, general and administrative - The adjustment to selling, general and administrative expenses primarily related to the impact of the error corrections on the associated commissions and bonuses.

The corrections summarized below include consideration of the income tax effect on the adjustments. The following schedules reconcile the amounts as originally reported in the applicable financial statement to the corresponding restated amounts. For a description of certain adjustments contained in the tables below see the corresponding disclosures labeled (a) through (e) above.

Restated condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments				As Restated
Year Ended December 31, 2017:
Revenue	$	1,136,256	$	2,105		(b)(c)(d)	$	1,138,361
Cost of goods sold	857,921		4,982			(a)(b)(c)	862,903
Gross profit	278,335		(2,877		)		275,458
Selling, general and administrative	225,738		1,515			(e)	227,253
Income from operations	38,530		(4,392		)		34,138
Income before taxes	32,110		(4,392		)		27,718
Income tax expense	13,131		(1,843		)	*	11,288
Net income	18,979		(2,549		)		16,430
Basic earnings per share	$	0.35	$	(0.04	)		$	0.31
Diluted earnings per share	$	0.35	$	(0.05	)		$	0.30
Year Ended December 31, 2016:
Revenue	$	1,090,704	$	3,698		(b)(c)	$	1,094,402
Cost of goods sold	827,156		4,682			(b)(c)	831,838
Gross profit	263,548		(984		)		262,564
Selling, general and administrative	209,967		(443		)	(e)	209,524
Income from operations	19,563		(541		)		19,022
Income before taxes	15,325		(542		)		14,783
Income tax expense	10,955		(121		)	*	10,834
Net income	4,370		(421		)		3,949
Basic earnings per share	$	0.08	$	(0.01	)		$	0.07
Diluted earnings per share	$	0.08	$	(0.01	)		$	0.07

* The adjustment to income tax expense for the years ended December 31, 2017 and 2016 primarily relates to the tax effect of the adjustments summarized above.

Restated condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported			Adjustments			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Comprehensive income	20,697			(2,547		)	18,150
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Comprehensive loss	(2,436		)	(762		)	(3,198		)

Restated condensed consolidated balance sheet amounts (in thousands)

	As Previously Reported			Adjustments				As Restated
As of December 31, 2017:
Accounts receivable	$	206,712		$	(1,326	)		$	205,386
Unbilled revenue	49,389			627			(d)	50,016
Inventories	34,807			5,887			(b)(c)	40,694
Prepaid expenses	19,638			(1,073		)		18,565
Other current assets	32,694			5,171			**	37,865
Total current assets	373,802			9,286				383,088
Deferred income taxes	612			79				691
Other non-current assets	1,382			254				1,636
Total intangibles and other assets	229,503			333				229,836
Total assets	640,019			9,619				649,638
Accounts payable	$	134,609		$	6,555		(a)(b)(d)	$	141,164
Accrued expenses	33,694			697				34,391
Other current liabilities	20,956			3,122			**	24,078
Deferred revenue	13,685			3,935			(c)	17,620
Total current liabilities	202,943			14,310				217,253
Deferred income taxes	12,348			(305		)		12,043
Other long-term liabilities	6,771			628				7,399
Total liabilities	350,461			14,632				365,093
Accumulated other comprehensive loss	$	(19,079	)	$	(150	)		$	(19,229	)
Retained earnings	129,305			(4,863		)		124,442
Total stockholders' equity	289,559			(5,014		)		284,545
Total liabilities and stockholders' equity	640,019			9,619				649,638
As of December 31, 2016:
Accounts receivable	$	182,874		$	(410	)		$	182,464
Unbilled revenue	32,723			(1,207		)	(b)(d)	31,516
Inventories	31,638			4,810			(b)(c)	36,448
Prepaid expenses	18,772			(313		)		18,459
Other current assets	24,769			(172		)		24,597
Total current assets	321,700			2,708				324,408
Other non-current assets	1,374			280				1,654
Total intangibles and other assets	236,642			280				236,923
Total assets	590,999			2,988				593,987
Accounts payable	$	121,289		$	1,723		(a)(d)	$	123,012
Accrued expenses	30,068			(313		)		29,755
Other current liabilities	22,971			(395		)		22,576
Deferred revenue	12,078			4,324			(c)	16,402
Total current liabilities	205,688			5,340				211,028
Deferred income taxes	11,291			(525		)		10,766
Other long-term liabilities	1,926			638				2,564
Total liabilities	326,373			5,453				331,826

Accumulated other comprehensive loss	$	(20,799	)	$	(150	)	$	(20,949	)
Retained earnings	110,397			(2,315		)	108,082
Total stockholders' equity	264,626			(2,465		)	262,161
Total liabilities and stockholders' equity	590,999			2,988			593,987

** The changes in Other current assets and Other current liabilities as of December 31, 2017 primarily relate to netting adjustments to income tax accounts.

Restated condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported			Adjustments***			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Deferred income taxes	3,744			328			4,072
Accounts receivable and unbilled revenue	(40,959		)	(918		)	(41,877		)
Inventories	(3,169		)	(1,076		)	(4,245		)
Prepaid expenses and other assets	(8,989		)	(4,558		)	(13,547		)
Accounts payable	13,320			4,832			18,152
Accrued expenses and other liabilities	11,670			3,850			15,520
Net cash provided by operating activities	16,147			(91		)	16,056
Repurchases of common stock	$	(10,976	)	$	91		$	(10,885	)
Net cash used in financing activities	(4,972		)	91			(4,881		)
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Deferred income taxes	4,084			142			4,226
Accounts receivable and unbilled revenue	1,809			(4,460		)	(2,651		)
Inventories	1,690			4,665			6,355
Prepaid expenses and other assets	2,442			(10,648		)	(8,206		)
Accounts payable	(48,955		)	10,547			(38,408		)
Accrued expenses and other liabilities	12,759			174			12,933
Net cash provided by operating activities	10,525			—			10,525

*** The adjustments within the statement of cash flows for the years ended December 31, 2017 and 2016 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

Impact of Revision

As discussed above, Company has decided to voluntarily correct the financial statements for the year ended December 31, 2015, for immaterial errors primarily related to the timing of the recognition of (i) revenue and (ii) cost of goods sold as well as reclassifications between certain working capital accounts. Additionally, immaterial error corrections related to periods prior to January 1, 2015 are reflected as adjustments to beginning retained earnings of $2.6 million and to beginning accumulated other comprehensive loss of $0.2 million for the year ended December 31, 2015.

Revised condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments		As Revised
Year Ended December 31, 2015:
Revenue	1,029,353		(461	)	1,028,892
Cost of goods sold	789,159		(297	)	788,862
Gross profit	240,194		(164	)	240,030
Selling, general and administrative	197,291		(44	)	197,247
Loss from operations	(13,093	)	(120	)	(13,213	)
Loss before taxes	(20,771	)	(120	)	(20,891	)
Income tax expense	12,292		(794	)	11,498
Net loss	(33,063	)	674		(32,389	)
Basic loss per share	(0.63	)	0.02		(0.61	)
Diluted loss per share	(0.63	)	0.02		(0.61	)

Revised condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported		Adjustments	As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674	(32,389	)
Comprehensive loss	(41,655	)	1,015	(40,640	)

Revised condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported		Adjustments^		As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674		(32,389	)
Bad debt provision	1,949		(264	)	1,685
Deferred income taxes	6,947		(1,068	)	5,879
Accounts receivable and unbilled revenue	(10,361	)	(219	)	(10,580	)
Inventories	(8,188	)	(1,488	)	(9,676	)
Prepaid expenses and other assets	(6,138	)	1,998		(4,140	)
Accounts payable	26,199		(1,097	)	25,102
Accrued expenses and other liabilities	2,118		1,464		3,582
Net cash provided by operating activities	43,402		—		43,402

^The adjustments within the statement of cash flows for the years ended December 31, 2017 and 2016 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

Restatement of Prior Period Quarterly Financial Statements (Unaudited)

As discussed in greater detail in Note 20 - Restatement and Revision of Prior Period Financial Statements, the Company determined to restate its previously issued unaudited condensed consolidated financial statements for the quarterly periods within the years ended December 31, 2017 and 2016. The following tables summarize the impacts of the results on our previously reported condensed statements of operations and balances sheets included in our Quarterly Reports on Form 10-Q for each respective period. Certain line items in the quarterly financial data below were excluded because they were not impacted by the Restatement.

Condensed consolidated statements of income (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Revenue	$	264,405		$	270,461
Cost of goods sold	199,701			208,935
Gross profit	64,704			61,526
Operating expenses:
Selling, general and administrative expenses	53,615			51,477
Depreciation and amortization	2,904			4,596
Change in fair value of contingent consideration	(1,040		)	1,911
Restructuring charges	—			3,344
Income (loss) from operations	9,225			198
Other income (expense):
Interest income	34			14
Interest expense	(1,003		)	(1,077		)
Other, net	(224		)	(161		)
Total other expense	(1,193		)	(1,224		)
Income (loss) before taxes	8,032			(1,026		)
Income tax expense	2,354			2,110
Net income (loss)	$	5,678		$	(3,136	)
Basic earnings (loss) per share	$	0.11		$	(0.06	)
Diluted earnings (loss) per share	$	0.10		$	(0.06	)
Comprehensive income (loss)	$	7,657		$	(3,411	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	280,066		$	272,212		$	544,471		$	542,673
Cost of goods sold	210,020			206,232			409,721			415,167
Gross profit	70,046			65,980			134,750			127,506
Operating expenses:
Selling, general and administrative expenses	55,054			51,622			108,669			103,099
Depreciation and amortization	3,182			4,720			6,086			9,316
Change in fair value of contingent consideration	1,884			7,276			844			9,187
Restructuring charges	—			623			—			3,967
Income from operations	9,926			1,739			19,151			1,937
Other income (expense):
Interest income	12			24			46			38
Interest expense	(1,038		)	(985		)	(2,041		)	(2,062		)
Other, net	(1,164		)	291			(1,388		)	130
Total other expense	(2,190		)	(670		)	(3,383		)	(1,894		)
Income before taxes	7,736			1,069			15,768			42
Income tax expense	3,362			2,974			5,716			5,084
Net income (loss)	$	4,374		$	(1,905	)	$	10,052		$	(5,043	)
Basic earnings (loss) per share	$	0.08		$	(0.04	)	$	0.19		$	(0.09	)
Diluted earnings (loss) per share	$	0.08		$	(0.04	)	$	0.18		$	(0.09	)
Comprehensive income (loss)	$	8,253		$	(3,295	)	$	15,911		$	(6,708	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	288,523		$	276,002		$	832,994		$	818,675
Cost of goods sold	216,602			209,421			626,323			624,588
Gross profit	71,921			66,581			206,671			194,087
Operating expenses:
Selling, general and administrative expenses	57,186			52,466			165,855			155,565
Depreciation and amortization	3,317			5,066			9,403			14,382
Change in fair value of contingent consideration	(167		)	788			677			9,975
Restructuring charges	—			465			—			4,433
Income from operations	11,585			7,796			30,736			9,732
Other income (expense):
Interest income	31			26			77			63
Interest expense	(1,198		)	(1,190		)	(3,239		)	(3,252		)
Other, net	426			(114		)	(962		)	16
Total other expense	(741		)	(1,279		)	(4,124		)	(3,173		)
Income before taxes	10,844			6,517			26,612			6,559
Income tax expense	3,728			2,292			9,444			7,376
Net income (loss)	$	7,116		$	4,225		$	17,168		$	(817	)
Basic earnings (loss) per share	$	0.13		$	0.08		$	0.32		$	(0.02	)
Diluted earnings (loss) per share	$	0.13		$	0.08		$	0.31		$	(0.02	)
Comprehensive income (loss)	$	9,284		$	4,024		$	25,196		$	(2,683	)

Quarterly financial data (unaudited)

	Three Months Ended December 31, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	270,418	$	5,309		$	275,727
Gross profit	68,727		(250		)	68,477
Net income	5,047		(282		)	4,765
Net income per share:
Basic	0.09		—			0.09
Diluted	0.09		—			0.09

	Three Months Ended December 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	300,950	$	4,417		$	305,367
Gross profit	71,311		(2,524		)	68,787
Net income (loss)	1,500		(2,238		)	(738		)
Net income (loss) per share:
Basic	0.03		(0.04		)	(0.01		)
Diluted	0.03		(0.04		)	(0.01		)

Condensed consolidated balance sheets (unaudited)

	March 31, 2017			June 30, 2017			September 30, 2017
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	29,920		$	23,537		$	27,682
Accounts receivable, net of allowance for doubtful accounts of $2,504, $2,466 and $2,692 respectively	184,713			206,242			200,799
Unbilled revenue	33,771			34,264			48,645
Inventories	36,674			34,558			54,174
Prepaid expenses	23,912			23,588			22,018
Other current assets	20,302			20,475			31,529
Total current assets	329,292			342,664			384,847
Property and equipment, net	34,000			36,030			37,212
Intangibles and other assets:
Goodwill	203,269			205,399			206,704
Intangible assets, net	30,452			29,699			28,745
Deferred income taxes	1,440			1,281			1,432
Other non-current assets	1,633			1,547			1,592
Total intangibles and other assets	236,794			237,926			238,473
Total assets	$	600,086		$	616,620		$	660,532
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	114,616			126,382			130,406
Current portion of contingent consideration	17,165			—			—
Due to seller	1,093			17,842			—
Other current liabilities	24,359			25,210			30,416
Deferred revenue	16,885			15,392			15,709
Accrued expenses	32,422			27,409			32,889
Total current liabilities	206,540			212,235			209,420
Revolving credit facility	113,691			118,658			149,184
Deferred income taxes	9,818			9,876			9,839
Other long-term liabilities	2,697			2,625			2,595
Total liabilities	332,746			343,394			371,038
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 63,438, 63,808 and 63,964 shares issued, 53,565, 53,500 and 53,037 shares outstanding, respectively	6			6			6
Additional paid-in capital	228,106			230,030			232,979
Treasury stock at cost, 9,872, 10,308 and 9,927 shares, respectively	(54,949		)	(59,224		)	(54,938		)
Accumulated other comprehensive loss	(18,970		)	(15,090		)	(12,922		)
Retained earnings	113,147			117,504			124,369
Total stockholders' equity	267,340			273,226			289,494
Total liabilities and stockholders' equity	$	600,086		$	616,620		$	660,532

	March 31, 2016			June 30, 2016			September 30, 2016
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	20,929		$	31,606		$	20,787
Accounts receivable, net of allowance for doubtful accounts of $1,759, $1,609 and $2,218, respectively	196,251			188,247			185,659
Unbilled revenue	32,457			29,202			37,982
Inventories	42,350			43,528			52,830
Prepaid expenses	12,524			11,712			11,551
Other current assets	16,699			17,738			31,302
Total current assets	321,210			322,033			340,111
Property and equipment, net	33,208			33,089			32,279
Intangibles and other assets:
Goodwill	206,069			204,897			204,978
Intangible assets, net	36,577			34,831			33,476
Deferred income taxes	788			882			1,123
Other non-current assets	1,469			1,415			1,426
Total intangibles and other assets	244,903			242,025			241,003
Total assets	$	599,321		$	597,148		$	613,393
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	129,894			139,914			129,869
Current portion of contingent consideration	11,131			3,862			19,320
Due to seller	3,604			8,527			1,683
Other current liabilities	24,401			24,200			25,760
Deferred revenue	14,589			15,180			13,409
Accrued expenses	23,939			16,096			20,788
Total current liabilities	207,558			207,779			210,829
Revolving credit facility	118,615			111,566			133,734
Deferred income taxes	9,652			11,061			10,622
Contingent consideration, net of current portion	9,188			14,699			—
Other long-term liabilities	3,129			2,995			2,591
Total liabilities	348,142			348,100			357,776
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 62,867, 63,086 and 63,274 shares issued, 53,321, 53,583 and 53,770 shares outstanding, respectively	6			6			6
Additional paid-in capital	215,723			216,540			219,085
Treasury stock at cost, 9,547, 9,503 and 9,504 shares, respectively	(52,207		)	(51,724		)	(51,724		)
Accumulated other comprehensive loss	(14,077		)	(15,467		)	(15,668		)
Retained earnings	101,734			99,693			103,918
Total stockholders' equity	251,179			249,048			255,617
Total liabilities and stockholders' equity	$	599,321		$	597,148		$	613,393

Condensed consolidated statements of cash flows (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	5,678		$	(3,136	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	2,904			4,596
Stock-based compensation expense	1,419			1,241
Deferred income taxes	478			(546		)
Change in fair value of contingent consideration liability	(1,040		)	1,911
Bad debt provision	175			656
Other operating activities	52			52
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(4,680		)	(15,863		)
Inventories	(226		)	453
Prepaid expenses and other assets	(1,167		)	5,968
Change in liabilities, net of acquisitions:
Accounts payable	(8,396		)	(31,526		)
Accrued expenses and other liabilities	4,923			11,627
Net cash used in operating activities	120			(24,566		)
Cash flows from investing activities
Purchases of property and equipment	(3,042		)	(3,987		)
Net cash used in investing activities	(3,042		)	(3,987		)
Cash flows from financing activities
Net borrowings of revolving credit facility	6,519			19,358
Net short-term secured repayments	(801		)	(1,803		)
Repurchases of common stock	(4,342		)	—
Payments of contingent consideration	—			(525		)
Proceeds from exercise of stock options	189			984
Other financing activities	(95		)	382
Net cash provided by in financing activities	1,470			18,396
Effect of exchange rate changes on cash and cash equivalents	448			331
Decrease in cash and cash equivalents	(1,004		)	(9,826		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	29,920		$	20,929

	Six Months Ended June 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	10,052		$	(5,043	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	6,086			9,316
Stock-based compensation expense	2,921			2,358
Deferred income taxes	624			557
Change in fair value of contingent consideration liability	844			9,187
Intangible asset impairment charges	—			789
Bad debt provision	82			—
Other operating activities	104			105
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(26,620		)	(4,738		)
Inventories	1,890			(725		)
Prepaid expenses and other assets	(971		)	5,742
Change in liabilities, net of acquisitions:
Accounts payable	3,370			(21,506		)
Accrued expenses and other liabilities	(69		)	3,110
Net cash used in operating activities	(1,687		)	(848		)
Cash flows from investing activities
Purchases of property and equipment	(7,024		)	(7,445		)
Net cash used in investing activities	(7,024		)	(7,445		)
Cash flows from financing activities
Net borrowings of revolving credit facility	11,491			12,553
Net short-term secured borrowings	37			104
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(2,089		)	(4,144		)
Proceeds from exercise of stock options	1,319			1,090
Other financing activities	(119		)	(474		)
Net cash provided by in financing activities	598			9,129
Effect of exchange rate changes on cash and cash equivalents	726			15
(Decrease) increase in cash and cash equivalents	(7,387		)	851
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	23,537			31,606

	Nine Months Ended September 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	17,168		$	(817	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	9,403			14,382
Stock-based compensation expense	5,296			4,097
Deferred income taxes	448			372
Change in fair value of contingent consideration liability	677			9,975
Bad debt provision	268			1,433
Other operating activities	157			156
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(35,732		)	(11,573		)
Inventories	(17,726		)	(10,027		)
Prepaid expenses and other assets	(10,567		)	(7,622		)
Change in liabilities, net of acquisitions:
Accounts payable	7,395			(31,551		)
Accrued expenses and other liabilities	10,830			7,543
Net cash used in operating activities	(12,383		)	(23,632		)
Cash flows from investing activities
Purchases of property and equipment	(10,274		)	(10,502		)
Net cash used in investing activities	(10,274		)	(10,502		)
Cash flows from financing activities
Net borrowings of revolving credit facility	42,258			34,722
Net short-term secured borrowings (repayments)	633			(820		)
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(15,345		)	(11,008		)
Proceeds from exercise of stock options	1,824			2,002
Other financing activities	(850		)	(680		)
Net cash provided by in financing activities	18,479			24,216
Effect of exchange rate changes on cash and cash equivalents	936			(50		)
Decrease in cash and cash equivalents	(3,242		)	(9,968		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	27,682		$	20,787

Restated and revised consolidated statements of income amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	267,390	$	(2,985	)	$	264,405
Cost of goods sold	203,113		(3,412		)	199,701
Gross profit	64,277		427			64,704
Selling, general and administrative expenses	53,427		188			53,615
Income from operations	8,986		239			9,225
Income before taxes	7,793		239			8,032
Income tax expense	2,337		17			2,354
Net income	5,456		222			5,678
Basic earnings per share	0.10		0.01			0.11
Diluted earnings per share	0.10		—			0.10
Comprehensive income	7,435		222			7,657

	Three Months Ended March 31, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	271,073		$	(612	)	$	270,461
Cost of goods sold	209,127			(192		)	208,935
Gross profit	61,946			(420		)	61,526
Selling, general and administrative expenses	51,492			(15		)	51,477
Income from operations	603			(405		)	198
Loss before taxes	(621		)	(405		)	(1,026		)
Income tax expense	2,072			38			2,110
Net loss	(2,693		)	(443		)	(3,136		)
Basic loss per share	(0.05		)	(0.01		)	(0.06		)
Diluted loss per share	(0.05		)	(0.01		)	(0.06		)
Comprehensive loss	(3,163		)	(248		)	(3,411		)

	Three Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,530	$	536		$	280,066
Cost of goods sold	209,303		717			210,020
Gross profit	70,227		(181		)	70,046
Selling, general and administrative expenses	55,086		(32		)	55,054
Income from operations	10,075		(149		)	9,926
Income before taxes	7,884		(149		)	7,736
Income tax expense	3,391		(29		)	3,362
Net income	4,493		(120		)	4,374
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	8,373		(120		)	8,253

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	546,920	$	(2,449	)	$	544,471
Cost of goods sold	412,416		(2,695		)	409,721
Gross profit	134,504		246			134,750
Selling, general and administrative expenses	108,513		156			108,669
Income from operations	19,061		90			19,151
Income before taxes	15,678		90			15,768
Income tax expense	5,727		(11		)	5,716
Net income	9,951		101			10,052
Basic earnings per share	0.19		—			0.19
Diluted earnings per share	0.18		—			0.18
Comprehensive income	15,810		101			15,911

	Three Months Ended June 30, 2016
	As Previously Reported			Adjustments		As Restated
Revenue	$	269,220		$	2,992	$	272,212
Cost of goods sold	204,126			2,106		206,232
Gross profit	65,093			886		65,980
Selling, general and administrative expenses	51,418			203		51,622
Income from operations	1,056			683		1,739
Income before taxes	386			683		1,069
Income tax expense	2,710			264		2,974
Net loss	(2,324		)	419		(1,905		)
Basic loss per share	(0.04		)	—		(0.04		)
Diluted loss per share	(0.04		)	—		(0.04		)
Comprehensive loss	(3,714		)	419		(3,295		)

	Six Months Ended June 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	540,292		$	2,381		$	542,673
Cost of goods sold	413,253			1,914			415,167
Gross profit	127,039			467			127,506
Selling, general and administrative expenses	102,910			189			103,099
Income from operations	1,659			278			1,937
Income (loss) before taxes	(235		)	277			42
Income tax expense	4,782			302			5,084
Net loss	(5,017		)	(26		)	(5,043		)
Basic loss per share	(0.09		)	—			(0.09		)
Diluted loss per share	(0.09		)	—			(0.09		)
Comprehensive loss	(6,877		)	169			(6,708		)

	Three Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	288,386	$	137		$	288,523
Cost of goods sold	215,867		735			216,602
Gross profit	72,519		(598		)	71,921
Selling, general and administrative expenses	57,134		52			57,186
Income from operations	12,236		(649		)	11,585
Income before taxes	11,495		(650		)	10,844
Income tax expense	3,967		(239		)	3,728
Net income	7,528		(411		)	7,116
Basic earnings per share	0.14		(0.01		)	0.13
Diluted earnings per share	0.14		(0.01		)	0.13
Comprehensive income	9,696		(411		)	9,284

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	835,306	$	(2,312	)	$	832,994
Cost of goods sold	628,282		(1,959		)	626,323
Gross profit	207,024		(353		)	206,671
Selling, general and administrative expenses	165,647		208			165,855
Income from operations	31,297		(561		)	30,736
Income before taxes	27,173		(562		)	26,612
Income tax expense	9,694		(250		)	9,444
Net income	17,479		(311		)	17,168
Basic earnings per share	0.32		—			0.32
Diluted earnings per share	0.32		(0.01		)	0.31
Comprehensive income	25,506		(311		)	25,196

	Three Months Ended September 30, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,993	$	(3,991	)	$	276,002
Cost of goods sold	212,212		(2,791		)	209,421
Gross profit	67,781		(1,200		)	66,581
Selling, general and administrative expenses	52,601		(135		)	52,466
Income from operations	8,860		(1,064		)	7,796
Income before taxes	7,581		(1,064		)	6,517
Income tax expense	3,240		(948		)	2,292
Net income	4,341		(116		)	4,225
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	4,140		(116		)	4,024

	Nine Months Ended September 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	820,286		$	(1,611	)	$	818,675
Cost of goods sold	625,465			(877		)	624,588
Gross profit	194,821			(734		)	194,087
Selling, general and administrative expenses	155,511			54			155,565
Income from operations	10,520			(788		)	9,732
Income before taxes	7,347			(788		)	6,559
Income tax expense	8,023			(647		)	7,376
Net loss	(676		)	(141		)	(817		)
Basic loss per share	(0.01		)	(0.01		)	(0.02		)
Diluted loss per share	(0.01		)	(0.01		)	(0.02		)
Comprehensive loss	(2,201		)	(482		)	(2,683		)

Restated and revised consolidated balance sheet amounts (unaudited)

	As of March 31, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	187,028		(2,315	)	184,713
Unbilled revenue	35,712		(1,941	)	33,771
Inventories	30,338		6,336		36,674
Other current assets	20,598		(296	)	20,302
Total current assets	327,508		1,784		329,292
Other non-current assets	1,353		280		1,633
Total other assets	236,514		280		236,794
Total assets	598,022		2,064		600,086
Accounts payable	114,399		217		114,616
Accrued expenses	32,547		(125	)	32,422
Other current liabilities	25,231		(872	)	24,359
Deferred revenue	12,405		4,480		16,885
Total current liabilities	202,840		3,700		206,540
Deferred income taxes	9,848		(30	)	9,818
Other long-term liabilities	2,060		637		2,697
Total liabilities	328,439		4,307		332,746
Accumulated other comprehensive loss	(18,820	)	(150	)	(18,970	)
Retained earnings	115,240		(2,093	)	113,147
Total stockholders' equity	269,583		(2,243	)	267,340
Total liabilities and stockholders' equity	598,022		2,064		600,086

	As of June 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	208,382		(2,140	)	206,242
Unbilled revenue	36,515		(2,251	)	34,264
Inventories	28,192		6,366		34,558
Other current assets	20,949		(474	)	20,475
Total current assets	341,163		1,501		342,664
Other non-current assets	1,267		280		1,547
Total intangibles and other assets	237,646		280		237,926
Total assets	614,839		1,781		616,620
Accounts payable	125,593		789		126,382
Accrued expenses	27,567		(158	)	27,409
Other current liabilities	26,163		(953	)	25,210
Deferred revenue	11,585		3,807		15,392
Total current liabilities	208,750		3,485		212,235
Deferred income taxes	9,852		24		9,876
Other long-term liabilities	1,988		637		2,625
Total liabilities	339,248		4,146		343,394
Accumulated other comprehensive loss	(14,940	)	(150	)	(15,090	)
Retained earnings	119,719		(2,215	)	117,504
Total stockholders' equity	275,591		(2,365	)	273,226
Total liabilities and stockholders' equity	614,839		1,781		616,620

	As of September 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	203,306		(2,507	)	200,799
Unbilled revenue	50,130		(1,485	)	48,645
Inventories	48,744		5,430		54,174
Other current assets	31,850		(321	)	31,529
Total current assets	383,730		1,117		384,847
Other non-current assets	1,312		280		1,592
Total intangibles and other assets	238,193		280		238,473
Total assets	659,135		1,397		660,532
Accounts payable	129,600		806		130,406
Accrued expenses	32,994		(105	)	32,889
Other current liabilities	31,589		(1,173	)	30,416
Deferred revenue	11,707		4,002		15,709
Total current liabilities	205,890		3,530		209,420
Deferred income taxes	9,834		5		9,839
Other long-term liabilities	1,958		637		2,595
Total liabilities	366,866		4,172		371,038
Accumulated other comprehensive loss	(12,772	)	(150	)	(12,922	)
Retained earnings	126,994		(2,625	)	124,369
Total stockholders' equity	292,269		(2,775	)	289,494
Total liabilities and stockholders' equity	659,135		1,397		660,532

	As of March 31, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	200,629		(4,378	)	196,251
Unbilled revenue	34,548		(2,091	)	32,457
Inventories	34,715		7,635		42,350
Prepaid expenses	12,957		(433	)	12,524
Other current assets	16,708		(8	)	16,699
Total current assets	320,485		725		321,210
Total assets	598,596		725		599,321
Accounts payable	130,048		(154	)	129,894
Accrued expenses	24,257		(318	)	23,939
Deferred revenue	10,975		3,614		14,589
Total current liabilities	204,416		3,142		207,558
Deferred income taxes	10,476		(824	)	9,652
Other long-term liabilities	2,772		358		3,129
Total liabilities	345,466		2,676		348,142
Accumulated other comprehensive loss	(14,463	)	386		(14,077	)
Retained earnings	104,071		(2,337	)	101,734
Total stockholders' equity	253,130		(1,951	)	251,179
Total liabilities and stockholders' equity	598,596		725		599,321

	As of June 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	193,297		(5,050	)	188,247
Unbilled revenue	27,857		1,345		29,202
Inventories	35,901		7,627		43,528
Prepaid expenses	12,145		(433	)	11,712
Other current assets	17,647		92		17,738
Total current assets	318,453		3,580		322,033
Total assets	593,567		3,582		597,148
Accounts payable	136,260		3,654		139,914
Accrued expenses	17,818		(1,722	)	16,096
Deferred revenue	11,793		3,387		15,180
Total current liabilities	202,460		5,319		207,779
Deferred income taxes	11,620		(559	)	11,061
Other long-term liabilities	2,639		356		2,995
Total liabilities	342,984		5,116		348,100
Accumulated other comprehensive loss	(15,853	)	386		(15,467	)
Retained earnings	101,614		(1,921	)	99,693
Total stockholders' equity	250,583		(1,535	)	249,048
Total liabilities and stockholders' equity	593,567		3,581		597,148

	As of September 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	190,438		(4,779	)	185,659
Unbilled revenue	40,505		(2,523	)	37,982
Inventories	45,377		7,453		52,830
Prepaid expenses	11,984		(433	)	11,551
Other current assets	30,528		774		31,302
Total current assets	339,619		492		340,111
Total assets	612,901		492		613,393
Accounts payable	129,980		(111	)	129,869
Accrued expenses	21,037		(249	)	20,788
Deferred revenue	9,755		3,654		13,409
Total current liabilities	207,535		3,294		210,829
Deferred income taxes	11,594		(972	)	10,622
Other long-term liabilities	2,235		356		2,591
Total liabilities	355,098		2,678		357,776
Accumulated other comprehensive loss	(15,518	)	(150	)	(15,668	)
Retained earnings	105,954		(2,036	)	103,918
Total stockholders' equity	257,803		(2,186	)	255,617
Total liabilities and stockholders' equity	612,901		492		613,393

Restated and revised consolidated statement of cash flow amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments		As Restated
Net income	5,456		222		5,678
Deferred income taxes	(16	)	494		478
Accounts receivable and unbilled revenue	(7,318	)	2,638		(4,680	)
Inventories	1,300		(1,526	)	(226	)
Prepaid expenses and other assets	(979	)	(188	)	(1,167	)
Accounts payable	(6,890	)	(1,506	)	(8,396	)
Accrued expenses and other liabilities	5,057		(134	)	4,923
Net cash provided by operating activities	120		—		120

	Three Months Ended March 31, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(2,693	)	(443	)	(3,136	)
Deferred income taxes	(389	)	(157	)	(546	)
Accounts receivable and unbilled revenue	(16,256	)	393		(15,863	)
Inventories	(1,388	)	1,841		453
Prepaid expenses and other assets	16,382		(10,414	)	5,968
Accounts payable	(40,196	)	8,670		(31,526	)
Accrued expenses and other liabilities	11,518		109		11,627
Net cash used in operating activities	(24,566	)	—		(24,566	)

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	9,951		101		10,052
Deferred income taxes	76		548		624
Accounts receivable and unbilled revenue	(29,395	)	2,775		(26,620	)
Inventories	3,446		(1,556	)	1,890
Prepaid expenses and other assets	(957	)	(14	)	(971	)
Accounts payable	4,304		(934	)	3,370
Accrued expenses and other liabilities	851		(920	)	(69	)
Net cash used in operating activities	(1,687	)	—		(1,687	)

	Six Months Ended June 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(5,017	)	(26	)	(5,043	)
Deferred income taxes	450		107		557
Accounts receivable and unbilled revenue	(2,366	)	(2,372	)	(4,738	)
Inventories	(2,573	)	1,848		(725	)
Prepaid expenses and other assets	16,255		(10,513	)	5,742
Accounts payable	(33,984	)	12,478		(21,506	)
Accrued expenses and other liabilities	4,632		(1,522	)	3,110
Net cash used in operating activities	(848	)	—		(848	)

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	17,479		(311	)	17,168
Deferred income taxes	(82	)	530		448
Accounts receivable and unbilled revenue	(38,108	)	2,376		(35,732	)
Inventories	(17,106	)	(620	)	(17,726	)
Prepaid expenses and other assets	(10,401	)	(166	)	(10,567	)
Accounts payable	8,312		(917	)	7,395
Accrued expenses and other liabilities	11,722		(891	)	10,830
Net cash used in operating activities	(12,383	)	—		(12,383	)

	Nine Months Ended September 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(676	)	(141	)	(817	)
Deferred income taxes	677		(305	)	372
Accounts receivable and unbilled revenue	(12,798	)	1,225		(11,573	)
Inventories	(12,050	)	2,023		(10,027	)
Prepaid expenses and other assets	3,574		(11,196	)	(7,622	)
Accounts payable	(40,264	)	8,713		(31,551	)
Accrued expenses and other liabilities	7,861		(318	)	7,543
Net cash used in operating activities	(23,632	)	—		(23,632	)

XML

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2017

Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Valuation and Qualifying Accounts (in thousands)

Description	Balance at Beginning of  Period		Charged to Expense		(Uncollectible Accounts Written Off,  Net of  Recoveries)			Balance at End of Period
Fiscal year ended December 31, 2017 Allowance for doubtful accounts	$	2,622	$	454	$	457		$	3,534
Fiscal year ended December 31, 2016 Allowance for doubtful accounts	$	1,231	$	2,171	$	(780	)	$	2,622
Fiscal year ended December 31, 2015 Allowance for doubtful accounts	$	2,685	$	1,685	$	(3,139	)	$	1,231

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of InnerWorkings, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Preparation of Financial Statements and Use of Estimates

Preparation of Financial Statements and Use of Estimates

The preparation of the consolidated financial statements is in conformity with accounting principles generally accepted in the United States ("GAAP"). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates, including those related to product returns, allowance for doubtful accounts, inventories and inventory valuation, valuation and impairments of goodwill and long-lived assets, income taxes, accrued bonus, contingencies, stock-based compensation and litigation costs. The Company bases its estimates on historical experience and on other assumptions that its management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying value of assets and liabilities when those values are not readily apparent from other sources. Actual results can differ from those estimates.

Foreign Currency Translation

Foreign Currency Translation

The Company determines the functional currency for its parent company and each of its subsidiaries by reviewing the currencies in which their respective operating activities occur. Assets and liabilities of these operations are translated into U.S. currency at the rates of exchange at the balance sheet date. Income and expense items are translated at average monthly rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Transaction gains and losses arising from activities in other than the applicable functional currency are calculated using average exchange rates for the applicable period and reported in net income as a non-operating item in each period. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate.

The net realized gains (losses) on foreign currency transactions was $(1.4) million, $0.6 million and $(3.3) million for the years ended December 31, 2017, 2016 and 2015, respectively. As further discussed in Note 2, the net realized losses on foreign currency transactions for the year ended December 31, 2015 includes a charge of $1.5 million for the remeasurement of the Company's net assets in Venezuela.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue upon meeting all of the following revenue recognition criteria, which is typically met upon shipment or delivery of our products to customers: (i) persuasive evidence of an arrangement exists through customer contracts and orders, (ii) the customer takes title and assumes the risks and rewards of ownership, (iii) the sales price charged is fixed or determinable as evidenced by customer contracts and orders and (iv) collectability is reasonably assured. Unbilled revenue represents shipments or deliveries that have been made to customers for which the related account receivable has not yet been invoiced.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605-45, Revenue Recognition – Principal Agent Considerations, the Company generally reports revenue on a gross basis because the Company is the primary obligor in its arrangements to procure marketing materials and other products for its customers. Under these arrangements, the Company is responsible for the fulfillment, including the acceptability, of the printed materials and other products. In addition, the Company (i) determines which suppliers are included in its network, (ii) has discretion to select from among the suppliers within its network, (iii) is obligated to pay its suppliers regardless of whether it is paid by its customers and (iv) has reasonable latitude to establish exchange price. In some transactions, the Company also has general inventory risk and is involved in the determination of the nature or characteristics of the printed materials and products. When the Company is not the primary obligor, revenues are reported on a net basis.

The Company recognizes revenue for creative, design, installation, warehousing and other services provided to its customers which may be delivered in conjunction with the procurement of marketing materials at the time when delivery and customer acceptance occur and all other revenue recognition criteria are met. When provided on a stand-alone basis, the Company recognizes revenue for these services upon completion of the service. Service revenue has not been material to the Company’s overall revenue to date.

The Company records taxes collected from customers and remitted to governmental authorities on a net basis.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts Receivable

Accounts receivable are uncollateralized customer obligations due under normal trade terms. Payment terms with customers are generally 30 to 90 days from the invoice date. Accounts receivable are stated at the amount billed to the customer, less an estimate for potential bad debts. Interest is not generally accrued on outstanding balances.

The carrying amount of accounts receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company estimates the collectability of its accounts receivable based on a combination of factors including, but not limited to, customer credit ratings and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings or substantial downgrading of credit ratings), the Company provides allowances for bad debts against amounts due to reduce the net recognized receivable to the amount it reasonably believes will be collected. Aged receivables are reviewed on a regular basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted.

Inventories

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Net realizable value is based upon an estimated average selling price reduced by estimated costs of disposal. Inventories primarily consist of purchased finished goods. Finished goods inventory includes consigned inventory held on behalf of customers as well as inventory held at third-party fulfillment centers and subcontractors.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows:

Computer equipment	3 years
Software, including internal-use software	1 to 6 years
Office equipment	5 years
Furniture and fixtures	7 years

Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases. 

Internal-Use Software

Internal-Use Software

In accordance with ASC 350-40, Intangibles—Goodwill and Other, Internal-Use Software, certain costs incurred in the planning and evaluation stage of internal-use computer software are expensed as incurred. Certain costs incurred during the application development stage are capitalized and included in property and equipment. Capitalized internal-use software costs are depreciated over the expected economic useful life of three to six years using the straight-line method. Capitalized internal-use software asset depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $5.4 million, $9.2 million and $8.6 million, respectively and is included in total depreciation expense. At December 31, 2017 and 2016, the net book value of internal-use software was $29.7 million and $26.0 million, respectively.

Effective October 1, 2016, the Company changed the estimated useful lives of some of its software assets. The estimated useful lives of such assets were increased by an average of approximately 4.5 years, see note 7.

Goodwill

Goodwill

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of businesses acquired. In accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"), goodwill is not amortized, but instead is tested for impairment annually or more frequently if circumstances indicate a possible impairment may exist. Absent any interim indicators of impairment, the Company tests for goodwill impairment as of the first day of its fourth fiscal quarter of each year.

Under ASC 350, an entity is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If the quantitative test is required, in the first step, the fair value for each reporting unit is compared to its book value including goodwill. In the case that the fair value is less than the book value, a second step is performed which compares the implied fair value of goodwill to the book value of goodwill. The fair value for the goodwill is determined based on the difference between the fair value of the reporting unit and the net fair values of the identifiable assets and liabilities. If the implied fair value of the goodwill is less than the book value of the goodwill, the difference is recognized as an impairment. 

At October 1, 2017, the Company elected to perform a qualitative assessment of the likelihood that goodwill is impaired. Based on the assessment, no impairment was identified as of October 1, 2017. The Company does not believe that goodwill is impaired as of December 31, 2017.

Other Intangible Assets

Other Intangible Assets

In accordance with ASC 350, Intangibles—Goodwill and Other, the Company amortizes its intangible assets with finite lives over their respective estimated useful lives and reviews for impairment whenever impairment indicators exist. Impairment indicators could include significant under-performance relative to the historical or projected future operating results, significant changes in the manner of use of assets, significant negative industry or economic trends or significant changes in the Company’s market capitalization relative to net book value. Any changes in key assumptions used by the Company, including those set forth above, could result in an impairment charge and such a charge could have a material adverse effect on the Company’s consolidated results of operations. The Company’s intangible assets consist of customer lists, non-competition agreements, trade names and patents. The Company’s customer lists, which have an estimated weighted-average useful life of approximately fourteen years, are being amortized using the economic life method. The Company’s non-competition agreements, trade names and patents are being amortized on the straight-line basis over their estimated weighted-average useful lives of approximately four years, thirteen years and nine years, respectively.

In the fourth quarter of 2016, the Company recorded a non-cash, intangible asset impairment charge of $0.1 million. For additional information related to the intangible asset impairment, see Note 5. There were no impairment charges recorded in 2017 or 2015.

Shipping and Handling Costs

Shipping and Handling Costs

Shipping and handling costs are classified in cost of goods sold in the consolidated statements of operations.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, under which deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial statement carrying values of assets and liabilities and their respective tax bases. A valuation allowance is established to reduce the carrying value of deferred tax assets if it is considered more likely than not that such assets will not be realized. Any change in the valuation allowance would be charged to income in the period such determination was made.

The Company recognizes the tax benefit from an uncertain tax position only if it is “more likely than not” the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. There were no interest or penalties related to unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015.

Based on the Company’s evaluation, it was concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. The evaluation was performed for the tax years ended December 31, 2017, 2016, 2015 and 2014, the tax years which remain subject to examination by major tax jurisdictions as of December 31, 2017.

On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Act”). The Act makes changes to the corporate tax rate, business-related deductions and taxation of foreign earnings, among others, that will generally be effective for taxable years beginning after December 31, 2017. As of the date of enactment, we have adjusted our deferred tax assets and liabilities for our new statutory rate which resulted in a $5.1 million credit to our income tax provision for the year ended December 31, 2017. In addition, we have estimated and recorded a provisional expense $5.3 million for transition tax related to our foreign operations.

Advertising

Advertising

Costs of advertising, which are expensed as incurred by the Company, were $1.2 million, $1.4 million and $1.0 million for the years ended December 31, 2017, 2016 and 2015, respectively and are included in selling, general and administrative expenses in the consolidated statement of operations.

Comprehensive Income

Comprehensive Income (Loss)

The components of accumulated comprehensive loss included in the Consolidated Balance Sheets at December 31, 2017 and 2016 are as follows (in thousands):

	Foreign Currency Translation Adjustments
Balance at December 31, 2015 (as revised)	$	(13,802	)
Other comprehensive loss before reclassifications	(7,147		)
Net current-period other comprehensive loss	(7,147		)
Balance at December 31, 2016 (as restated)	(20,949		)
Other comprehensive income before reclassifications	1,720
Net current-period other comprehensive income	1,720
Balance at December 31, 2017 (as restated)	$	(19,229	)

Share-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation awards in accordance with ASC 718, Compensation-Stock Compensation. Compensation expense is measured by determining the fair value of each award using the Black-Scholes option valuation model for stock options or the closing share price on the grant date for restricted shares and performance share units. The fair value is then recognized over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis for the entire award.

On June 1, 2017, the Compensation Committee approved, pursuant to the 2006 Stock Incentive Plan, awards of performance share units (“PSUs”) for certain executive officers and employees. The PSUs are performance-based awards that will settle in shares of the Company's common stock, in an amount between 0% and 200% of the target award level, based on the cumulative adjusted earnings per share and the return on invested capital achieved by the Company between April 1, 2017 and December 31, 2019. Compensation expense for PSUs is measured by determining the fair value of the award using the closing share price on the grant date and is recognized ratably from the grant date to the vesting date for the number of awards expected to vest. The amount of compensation expense recognized for PSUs is dependent upon a quarterly assessment of the likelihood of achieving the performance conditions and is subject to adjustment based on management's assessment of the Company's performance relative to the target number of shares performance criteria.

Stock-based compensation cost recognized during the period is based on the full grant date fair value of the share-based payment awards adjusted for any forfeitures during the period. Stock-based compensation expense is included in selling, general and administrative expenses in the consolidated statement of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Scope of Modification Accounting ("ASU 2017-09"), which amends ASC 718, Compensation - Stock Compensation. This ASU amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications. It does not change the accounting for modifications. The new guidance will be applied prospectively to awards modified on or after the adoption date. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), which simplifies the accounting for goodwill impairment by removing Step 2 of the goodwill impairment test. This ASU is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standard is not expected to have a material impact on the consolidated financial statements and related disclosures.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"), which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The guidance is effective for interim and annual periods beginning after December 15, 2017 and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on the Company's consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, ("ASU 2016-09") which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Under the standard, the income tax effects of awards are required to be recognized in the income statement when the awards vest or are settled, as opposed to in additional paid-in capital under the current guidance. The standard also provides an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur, which the Company has elected to adopt. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. This guidance can be applied either prospectively, retrospectively or using a modified retrospective transition method. Early adoption is permitted. In the first quarter of 2017, the Company applied a modified retrospective transition method to account for the changes under the standard related to income taxes and the policy election for recording forfeitures as they occur.

The Company adopted all amendments to the standard at January 1, 2017. The amendments related to the classification of excess tax benefits on the statement of cash flows were adopted prospectively and the classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes was adopted retrospectively. The adoption of both resulted in no prior period adjustments. With the adoption of the standards related to eliminating the requirement that excess tax benefits be realized before companies can recognize them and election to recognize forfeitures as they occur, the Company elected to use the modified retrospective method which resulted in changes to retained earnings, components of equity and net assets. The net cumulative effect of these changes resulted in a $2.1 million increase to additional paid in capital, a $2.3 million decrease to deferred tax liabilities and a $0.2 million increase to retained earnings.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842), ("ASU 2016-02") which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosure of key information about leasing arrangements. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability for most leases in the balance sheet as well as other qualitative and quantitative disclosures. The update is to be applied using a modified retrospective method and is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09"), which outlines a single comprehensive model for entities to use in accounting for revenue using a five-step process that supersedes virtually all existing revenue guidance. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The FASB has issued several amendments to the standard since ASU 2014-09.

The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method) or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective transition method). The Company will adopt ASU 2014-09 on January 1, 2018 using the modified retrospective transition method.

The Company is finalizing updates to the accounting policies and processes to address the variations from current practices, inclusive of the required additional disclosures in the period subsequent to adoption. Specifically, under the current guidance, the Company defers revenue for inventory billed but not yet shipped. As a result of the adoption of the new guidance, in certain situations the Company may be able to recognize revenue for inventory billed but not yet shipped, which could accelerate the timing, but not the total amount, of revenue recognized and would not impact the timing of cash flows. We are in the process of finalizing the measurement of the cumulative effect of adopting the new guidance.

The Company’s analysis of its contracts under the new standard supports two historical conclusions of the Company and its current revenue policy: 1) the Company typically recognizes revenue at a point in time rather than over a period of time and, 2) the Company typically recognizes revenue on a gross basis when the Company is the primary obligor. We plan to issue further disclosures around the adoption of ASC 606 Revenue from Contracts with Customers as part of our first quarter 2018 Form 10-Q filing.

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Schedule of Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows:

Computer equipment	3 years
Software, including internal-use software	1 to 6 years
Office equipment	5 years
Furniture and fixtures	7 years

Property and equipment at December 31, 2017 and 2016 consisted of the following (in thousands):  

	2017			2016
Computer equipment	$	10,985		$	9,568
Software, including internal-use software	78,410			68,980
Office equipment and furniture	6,111			5,073
Leasehold improvements	3,576			3,040
	99,082			86,661
Less accumulated depreciation	(62,368		)	(54,005		)
	$	36,714		$	32,656

Schedule of AOCI

The components of accumulated comprehensive loss included in the Consolidated Balance Sheets at December 31, 2017 and 2016 are as follows (in thousands):

	Foreign Currency Translation Adjustments
Balance at December 31, 2015 (as revised)	$	(13,802	)
Other comprehensive loss before reclassifications	(7,147		)
Net current-period other comprehensive loss	(7,147		)
Balance at December 31, 2016 (as restated)	(20,949		)
Other comprehensive income before reclassifications	1,720
Net current-period other comprehensive income	1,720
Balance at December 31, 2017 (as restated)	$	(19,229	)

XML

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Schedule of Contingent Consideration

Acquisitions

Contingent Consideration

In connection with certain of the Company’s acquisitions, contingent consideration is payable in cash or common stock upon the achievement of certain performance measures over future periods. The Company recorded the acquisition date fair value of the contingent consideration liability as additional purchase price. As discussed in Note 11, the process for determining the fair value of the contingent consideration liability consists of reviewing financial forecasts and assessing the likelihood of reaching the required performance measures based on factors specific to each acquisition as well as the Company’s historical experience with similar arrangements. Subsequent to the acquisition date, the Company estimates the fair value of the contingent consideration liability each reporting period and any adjustments made to the fair value are recorded in the Company’s results of operations. If an acquisition reaches the required performance measures within the reporting period, the fair value of the contingent consideration liability is increased to 100%, the maximum potential payment and reclassified to Due to seller.

On June 30, 2017, the EYELEVEL acquisition reached the required performance measures at the end of its earnout period and the balance of the fair value of the contingent consideration liability was reclassified to due to seller. During the third quarter of 2017 the company paid $17.7 million to settle the final balance owed to the sellers. As of December 31, 2017, there are no outstanding contingent consideration liabilities.

During the twelve months ended December 31, 2017 and 2016 and 2015, the Company recorded expense (income) of $0.7 million, $10.4 million and $(0.3) million, respectively, due to changes in the fair value of the contingent consideration liability. Please refer to Note 11 for a further summary of activities related to the contingent consideration balances.

Schedule of Equity Interest Issued or Issuable

The following table presents the number of shares issued as consideration for acquisitions and contingent consideration and the corresponding value of those shares during the years ended December 31, 2017, 2016 and 2015 (in thousands, except share value amounts):

	Shares of Common Stock Issued	Value of Shares		Average Share Value
Year ended December 31, 2017:
Payments of contingent consideration	441	$	4,678	$	10.61
Year ended December 31, 2016:
Payments of contingent consideration	244	$	2,012	$	8.25
Year ended December 31, 2015:
Payments of contingent consideration	238	$	1,570	$	6.59

XML

Goodwill (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following is a summary of the goodwill balance for each reportable segment as of December 31 (in thousands): 

	North America			International			Total
Balance as of December 31, 2015	$	170,736		$	35,521		$	206,257
Foreign exchange impact	21			(3,578		)	(3,557		)
Balance as of December 31, 2016	170,757			31,943			202,700
Foreign exchange impact	(72		)	(2,682		)	(2,754		)
Balance as of December 31, 2017	$	170,685		$	29,262		$	199,946

XML

Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

The following is a summary of the Company’s other intangible assets as of December 31 (in thousands):

	2017			2016			Weighted Average Life
Customer lists	$	74,615		$	72,667		13.6
Non-competition agreements	964			943			4.1
Trade names	2,510			2,510			13.3
Patents	57			57			9.0
	78,146			76,177
Less accumulated amortization	(50,583		)	(44,639		)
Intangible assets, net	$	27,563		$	31,538

Schedule of Future Amortization Expense

The estimated amortization expense for the next five years and thereafter, is as follows (in thousands):

2018	$	4,571
2019	4,338
2020	4,168
2021	3,862
2022	3,366
Thereafter	7,258
	$	27,563

XML

Restructuring Activities and Other Charges (Tables)

12 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Charges

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2017 (in thousands):

	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Other			Total
Balance at December 31, 2016	$	1,349		$	17		$	200		$	1,566
Expenses	—			—			—			—
Cash payments	(866		)	(17		)	(200		)	(1,082		)
Balance at December 31, 2017	$	484		$	—		$	—		$	484

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2016 (in thousands):

	Employee Severance and Related Benefits			Lease and Contract Termination Costs			Other (1)		Total
December 31, 2015	$	284		$	75		$	—	$	359
Expenses	4,552			863			200		5,615
Cash payments	(3,487		)	(921		)	—		(4,408		)
December 31, 2016	$	1,349		$	17		$	200	$	1,566

XML

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. The estimated useful lives, by asset class, are as follows:

Computer equipment	3 years
Software, including internal-use software	1 to 6 years
Office equipment	5 years
Furniture and fixtures	7 years

Property and equipment at December 31, 2017 and 2016 consisted of the following (in thousands):  

	2017			2016
Computer equipment	$	10,985		$	9,568
Software, including internal-use software	78,410			68,980
Office equipment and furniture	6,111			5,073
Leasehold improvements	3,576			3,040
	99,082			86,661
Less accumulated depreciation	(62,368		)	(54,005		)
	$	36,714		$	32,656

XML

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The Company leases many of its office facilities for various terms under long-term, noncancelable operating lease agreements. The leases expire at various dates from fiscal year 2018 through fiscal year 2026. Future minimum lease payments are presented below (in thousands): 

	Operating Leases
2018	$	6,942
2019	5,298
2020	4,334
2021	2,861
2022	1,699
Thereafter	2,080
Total minimum lease payments	$	23,214

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Contingency [Line Items]

Summary of Income Tax Contingencies [Table Text Block]

	Uncertain tax positions
	(as restated)
Balance at December 31, 2016	$	517
Additions based on tax positions related to the current year	—
Subtractions based on tax positions related to the current year	(35		)
Interest and penalties	17
Balance at December 31, 2017	$	499

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes consisted of the following components for the years ended December 31, 2017, 2016 and 2015 (in thousands):

	Year Ended December 31,
	2017		2016			2015
	(as restated)		(as restated)			(as revised)
Current income tax expense:
Federal	$	3,076	$	477		$	—
State	62		159			324
Foreign	4,078		5,972			5,295
Total current income tax expense	7,216		6,608			5,619
Deferred income tax expense (benefit):
Federal	1,959		4,165			2,619
State	1,575		414			166
Foreign	538		(353		)	3,094
Total deferred income tax expense	4,072		4,226			5,879
Income tax expense	$	11,288	$	10,834		$	11,498

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 differs from the amount computed by applying the U.S. federal income tax rate of 35% to pretax income (loss) because of the effect of the following items (in thousands):  

	Year Ended December 31,
	2017			2016			2015
	(as restated)			(as restated)			(as revised)
Tax expense (benefit) at U.S. federal income tax rate	$	9,706		$	5,175		$	(7,312	)
State income taxes, net of federal income tax effect	883			447			497
Federal and state deferred tax rate change	(5,119		)	—			—
Transition tax	5,323			—			—
Effect of non-US operations	(2,228		)	(781		)	89
Nontaxable contingent liability fair value changes and goodwill impairment	237			3,578			13,083
Research and development credit	(38		)	(140		)	(422		)
Change in valuation allowances	2,103			2,206			5,173
Prior year provision to return adjustment	(581		)	(137		)	(948		)
Write-off of deferred taxes and tax receivables	70			193			858
Nondeductible expense and other	932			293			480
Income tax expense	$	11,288		$	10,834		$	11,498

Schedule of Deferred Tax Assets and Liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the Company's tax assets and liabilities for financial reporting purposes and the amounts used for income tax return reporting purposes. At December 31, 2017 and 2016, the Company’s deferred tax assets and liabilities consisted of the following (in thousands):

	December 31,
	2017			2016
	(as restated)			(as restated)
Deferred tax assets:
Inventory reserve	$	700		$	902
Other reserves and allowances	370			4,455
Income tax basis in excess of financial statement basis in intangible assets	1,669			3,394
Deductible stock-based compensation	3,687			4,579
Net operating loss carryforward	13,669			10,070
Tax credit carryforwards	428			2,600
	20,523			26,000
Valuation allowance	(10,711		)	(8,292		)
Total deferred tax assets	9,812			17,708
Deferred tax liabilities:
Prepaid & other expenses	(265		)	(138		)
Fixed assets	(4,946		)	(5,913		)
Intangible assets	(15,953		)	(21,392		)
Total deferred tax liabilities	(21,164		)	(27,443		)
Net deferred tax liability	$	(11,352	)	$	(9,735	)

XML

Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables set forth the Company’s financial assets and financial liabilities measured at fair value on a recurring basis and the basis of measurement at December 31, 2016 (in thousands): 

At December 31, 2016	Total Fair Value Measurement		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs  (Level 2)		Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent consideration	$	19,283	$	—	$	—	$	19,283

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following table provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3) (in thousands):

	Fair Value Measurements at Reporting Date Using Significant Unobservable Inputs (Level 3)
	Contingent Consideration
Balance at December 31, 2015	$	22,162
Contingent consideration payments paid in cash	(11,374		)
Contingent consideration payments paid in stock	(2,012		)
Change in fair value(1)	10,417
Reclass to Due to seller	402
Foreign exchange impact(2)	(312		)
Balance at December 31, 2016	19,283
Contingent consideration payments paid in cash	(15,345		)
Contingent consideration payments paid in stock	(4,678		)
Change in fair value(1)	677
Foreign exchange impact(2)	63
Balance at December 31, 2017	$	—

(1) Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements, see note 3. These changes are recognized within operating expenses on the consolidated statements of operations.

(2) Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income.

XML

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Schedule of Earnings Per Share

The computation of basic and diluted earnings (loss) per common share for the years ended December 31, 2017, 2016 and 2015, is as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Numerator:
Net income (loss)	$	16,430	$	3,949	$	(32,389	)
Denominator:
Denominator for basic earnings (loss) per share—weighted-average shares outstanding	53,851		53,607		52,791
Effect of dilutive securities:
Employee stock options and restricted common shares	1,093		728		—
Contingently issuable shares	—		125		—
Denominator for diluted earnings (loss) per share	54,944		54,460		52,791
Basic earnings (loss) per share	$	0.31	$	0.07	$	(0.61	)
Diluted earnings (loss) per share	$	0.30	$	0.07	$	(0.61	)

XML

Stock-Based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity for the years ended December 31, 2017, 2016 and 2015 is as follows (in thousands, except per share amounts):

	Outstanding Options		Weighted- Average  Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2014	4,046		$	8.35	$	4,725
Granted	975		6.87		—
Exercised	(405	)	2.95		1,604
Forfeited	(556	)	9.58		—
Outstanding at December 31, 2015	4,060		8.37		2,760
Granted	1,348		8.15		—
Exercised	(420	)	6.27		4,455
Forfeited	(227	)	10.20		—
Outstanding at December 31, 2016	4,761		8.40		8,655
Granted	568		10.73		—
Exercised	(428	)	7.85		1,300
Forfeited	(467	)	10.39		539
Outstanding at December 31, 2017	4,434		$	8.57	$	9,340
Options vested and exercisable at December 31, 2017	2,505		$	8.62	$	5,860

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range

The following table summarizes information about all stock options outstanding for the Company as of December 31, 2017 (share amounts in thousands): 

Options Outstanding					Options Vested
Exercise Price	Number Outstanding	Weighted-Average Life Remaining (Years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0.00 - $4.36	64	1.29	$	3.11	64	$	3.11
$4.37 - $7.95	2,189	5.23	$	6.68	1,320	$	6.43
$7.96 - $11.97	1,613	7.50	$	9.55	552	$	9.32
$11.98 - $15.05	568	2.94	$	13.65	568	$	13.65
	4,434	5.70	$	8.57	2,505	$	8.62

The weighted-average fair values and ranges of exercise prices for stock options granted during the years ended December 31, 2017, 2016 and 2015, which vest ratably over four or five years, are as follows (in thousands, except per share amounts):

	Options Granted	Weighted-Average Fair Value		Exercise Prices
2015	975	$	3.39	$6.21 - $8.20
2016	1,348	$	3.38	$6.99 - $9.20
2017	568	$	4.42	$9.32 - $11.47

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The following assumptions were utilized in the Black-Scholes valuation model for options granted in 2017, 2016 and 2015:

	2017	2016	2015
Dividend yield	—	—	—
Risk-free interest rate	1.98%-2.34%	1.53%-2.03%	1.92%-2.12%
Expected life	6.5 years	6.5 years	6 years
Volatility	36.0%-38.0%	38.0%-50.0%	50.0	%

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity

A summary of restricted share activity is as follows (in thousands, except per share amounts):

	Outstanding  Restricted Common Shares		Weighted- Average Grant- Date Fair Value
Nonvested Restricted Common shares at December 31, 2014	1,090		$	8.92
Granted	688		6.90
Vested and transferred to unrestricted common stock	(465	)	8.40
Forfeited	(356	)	8.19
Nonvested Restricted Common shares at December 31, 2015	957		7.66
Granted	559		8.24
Vested and transferred to unrestricted common stock	(429	)	7.71
Forfeited	(78	)	8.04
Nonvested Restricted Common shares at December 31, 2016	1,009		7.92
Granted	332		11.00
Vested and transferred to unrestricted common stock	(403	)	8.28
Forfeited	(166	)	8.51
Nonvested Restricted Common shares at December 31, 2017	772		$	8.98

Schedule of Nonvested Performance-based Units Activity

	Outstanding  Performance Share Units		Weighted- Average Grant- Date Fair Value
Nonvested Performance Share Units at December 31, 2016	—		$	—
Granted	151,822		11.10
Forfeited	(23,588	)	11.10
Nonvested Performance Share Units at December 31, 2017	128,234		$	11.10

XML

Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2017

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

Supplemental cash flow information is as follows (in thousands):

	Year Ended December 31,
	2017		2016		2015
Cash paid for:
Interest	$	4,072	$	4,338	$	4,306
Income taxes	9,838		5,485		3,863
	$	13,910	$	9,823	$	8,169
Noncash investing and financing activities:
Repurchases of common stock (as restated)	$	91	$	—	$	—
Shares issued as payment of contingent consideration	4,678		2,012		1,570
	$	4,769	$	2,012	$	1,570

XML

Business Segments (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The table below presents total assets for the Company's reportable segments and Other as of December 31, 2017 and December 31, 2016.

	December 31,
	2017		2016
	(as restated)		(as restated)
North America	$	401,415	$	370,403
International	228,321		203,238
Other	19,902		20,346
Total Assets	$	649,638	$	593,987

The table below presents financial information for our reportable operating segments and Other for the fiscal years noted (in thousands): 

	North America		International		Other (2)			Total
Fiscal 2017 (as restated):
Revenue from third parties	$	780,511	$	357,850	$	—		$	1,138,361
Revenue from other segments	5,469		15,137		(20,606		)	—
Total revenue	785,980		372,987		(20,606		)	1,138,361
Adjusted EBITDA(1)	74,230		19,520		(35,867		)	57,883
Fiscal 2016 (as restated):
Revenue from third parties	736,140		358,262		—			1,094,402
Revenue from other segments	6,029		17,526		(23,555		)	—
Total revenue	742,169		375,788		(23,555		)	1,094,402
Adjusted EBITDA(1)	68,434		21,570		(31,392		)	58,612
Fiscal 2015 (as revised):
Revenue from third parties	708,071		320,821		—			1,028,892
Revenue from other segments	7		8,691		(8,698		)	—
Total revenue	708,078		329,512		(8,698		)	1,028,892
Adjusted EBITDA(1)	63,436		15,124		(27,881		)	50,679

(1) Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill and intangible asset impairment charges, restructuring and other charges, secured assets reserves, professional fees related to ASC 606 implementation, business development realignment, CEO search costs, and Czech currency impact on procurement margin is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies.

(2) Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses.

Schedule of Earnings Before Interest Tax Depreciation and Amortization Reconciliation

The table below reconciles Adjusted EBITDA and Income (loss) before income taxes in our Consolidated statement of operations (in thousands):

	Year Ended December 31,
	2017		2016		2015
	(as restated)		(as restated)		(as revised)
Adjusted EBITDA	$	57,883	$	58,612	$	50,679
Depreciation and amortization	13,390		17,916		17,472
Stock-based compensation	6,820		5,572		5,873
Change in fair value of contingent consideration	677		10,417		(270		)
Goodwill impairment charge	—		—		37,539
Intangible asset impairment charges	—		70		202
Restructuring and other charges	—		5,615		1,053
Business development realignment	715		—		—
Professional fees related to ASC 606 implementation	829		—		—
CEO search costs	454		—		—
Czech currency impact on procurement margin	860		—		—
Secured asset reserve(1)	—		—		2,023
Total other expense	6,420		4,239		7,678
Income (loss) before income taxes	$	27,718	$	14,783	$	(20,891	)

(1) The Company accrued a reserve of $2.0 million in 2015, respectively, on inventory in which it holds a security interest. The inventory was procured for a former clien

XML

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Table Text Block]

	Year Ended December 31, 2017
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(as restated)		(as restated)		(as restated)		(as restated)
Revenue	$	264,405	$	280,066	$	288,523	$	305,367
Gross profit	64,704		70,046		71,921		68,787
Net income	5,678		4,374		7,116		(738		)
Net income per share:
Basic	$	0.11	$	0.08	$	0.13	$	(0.01	)
Diluted	$	0.10	$	0.08	$	0.13	$	(0.01	)

	Year Ended December 31, 2016
	First Quarter			Second Quarter			Third Quarter		Fourth Quarter
	(as restated)			(as restated)			(as restated)		(as restated)
Revenue	$	270,461		$	272,212		$	276,002	$	275,727
Gross profit	61,526			65,980			66,581		68,477
Net income (loss)	(3,136		)	(1,905		)	4,225		4,765
Net income (loss) per share:
Basic	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09
Diluted	$	(0.06	)	$	(0.04	)	$	0.08	$	0.09

XML

Restatement and Revision of Prior Period Financial Statements (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

Revised condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments		As Revised
Year Ended December 31, 2015:
Revenue	1,029,353		(461	)	1,028,892
Cost of goods sold	789,159		(297	)	788,862
Gross profit	240,194		(164	)	240,030
Selling, general and administrative	197,291		(44	)	197,247
Loss from operations	(13,093	)	(120	)	(13,213	)
Loss before taxes	(20,771	)	(120	)	(20,891	)
Income tax expense	12,292		(794	)	11,498
Net loss	(33,063	)	674		(32,389	)
Basic loss per share	(0.63	)	0.02		(0.61	)
Diluted loss per share	(0.63	)	0.02		(0.61	)

Revised condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported		Adjustments	As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674	(32,389	)
Comprehensive loss	(41,655	)	1,015	(40,640	)

Revised condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported		Adjustments^		As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674		(32,389	)
Bad debt provision	1,949		(264	)	1,685
Deferred income taxes	6,947		(1,068	)	5,879
Accounts receivable and unbilled revenue	(10,361	)	(219	)	(10,580	)
Inventories	(8,188	)	(1,488	)	(9,676	)
Prepaid expenses and other assets	(6,138	)	1,998		(4,140	)
Accounts payable	26,199		(1,097	)	25,102
Accrued expenses and other liabilities	2,118		1,464		3,582
Net cash provided by operating activities	43,402		—		43,402

Restated condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments				As Restated
Year Ended December 31, 2017:
Revenue	$	1,136,256	$	2,105		(b)(c)(d)	$	1,138,361
Cost of goods sold	857,921		4,982			(a)(b)(c)	862,903
Gross profit	278,335		(2,877		)		275,458
Selling, general and administrative	225,738		1,515			(e)	227,253
Income from operations	38,530		(4,392		)		34,138
Income before taxes	32,110		(4,392		)		27,718
Income tax expense	13,131		(1,843		)	*	11,288
Net income	18,979		(2,549		)		16,430
Basic earnings per share	$	0.35	$	(0.04	)		$	0.31
Diluted earnings per share	$	0.35	$	(0.05	)		$	0.30
Year Ended December 31, 2016:
Revenue	$	1,090,704	$	3,698		(b)(c)	$	1,094,402
Cost of goods sold	827,156		4,682			(b)(c)	831,838
Gross profit	263,548		(984		)		262,564
Selling, general and administrative	209,967		(443		)	(e)	209,524
Income from operations	19,563		(541		)		19,022
Income before taxes	15,325		(542		)		14,783
Income tax expense	10,955		(121		)	*	10,834
Net income	4,370		(421		)		3,949
Basic earnings per share	$	0.08	$	(0.01	)		$	0.07
Diluted earnings per share	$	0.08	$	(0.01	)		$	0.07

* The adjustment to income tax expense for the years ended December 31, 2017 and 2016 primarily relates to the tax effect of the adjustments summarized above.

Restated condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported			Adjustments			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Comprehensive income	20,697			(2,547		)	18,150
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Comprehensive loss	(2,436		)	(762		)	(3,198		)

Restated condensed consolidated balance sheet amounts (in thousands)

	As Previously Reported			Adjustments				As Restated
As of December 31, 2017:
Accounts receivable	$	206,712		$	(1,326	)		$	205,386
Unbilled revenue	49,389			627			(d)	50,016
Inventories	34,807			5,887			(b)(c)	40,694
Prepaid expenses	19,638			(1,073		)		18,565
Other current assets	32,694			5,171			**	37,865
Total current assets	373,802			9,286				383,088
Deferred income taxes	612			79				691
Other non-current assets	1,382			254				1,636
Total intangibles and other assets	229,503			333				229,836
Total assets	640,019			9,619				649,638
Accounts payable	$	134,609		$	6,555		(a)(b)(d)	$	141,164
Accrued expenses	33,694			697				34,391
Other current liabilities	20,956			3,122			**	24,078
Deferred revenue	13,685			3,935			(c)	17,620
Total current liabilities	202,943			14,310				217,253
Deferred income taxes	12,348			(305		)		12,043
Other long-term liabilities	6,771			628				7,399
Total liabilities	350,461			14,632				365,093
Accumulated other comprehensive loss	$	(19,079	)	$	(150	)		$	(19,229	)
Retained earnings	129,305			(4,863		)		124,442
Total stockholders' equity	289,559			(5,014		)		284,545
Total liabilities and stockholders' equity	640,019			9,619				649,638
As of December 31, 2016:
Accounts receivable	$	182,874		$	(410	)		$	182,464
Unbilled revenue	32,723			(1,207		)	(b)(d)	31,516
Inventories	31,638			4,810			(b)(c)	36,448
Prepaid expenses	18,772			(313		)		18,459
Other current assets	24,769			(172		)		24,597
Total current assets	321,700			2,708				324,408
Other non-current assets	1,374			280				1,654
Total intangibles and other assets	236,642			280				236,923
Total assets	590,999			2,988				593,987
Accounts payable	$	121,289		$	1,723		(a)(d)	$	123,012
Accrued expenses	30,068			(313		)		29,755
Other current liabilities	22,971			(395		)		22,576
Deferred revenue	12,078			4,324			(c)	16,402
Total current liabilities	205,688			5,340				211,028
Deferred income taxes	11,291			(525		)		10,766
Other long-term liabilities	1,926			638				2,564
Total liabilities	326,373			5,453				331,826

Accumulated other comprehensive loss	$	(20,799	)	$	(150	)	$	(20,949	)
Retained earnings	110,397			(2,315		)	108,082
Total stockholders' equity	264,626			(2,465		)	262,161
Total liabilities and stockholders' equity	590,999			2,988			593,987

** The changes in Other current assets and Other current liabilities as of December 31, 2017 primarily relate to netting adjustments to income tax accounts.

Restated condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported			Adjustments***			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Deferred income taxes	3,744			328			4,072
Accounts receivable and unbilled revenue	(40,959		)	(918		)	(41,877		)
Inventories	(3,169		)	(1,076		)	(4,245		)
Prepaid expenses and other assets	(8,989		)	(4,558		)	(13,547		)
Accounts payable	13,320			4,832			18,152
Accrued expenses and other liabilities	11,670			3,850			15,520
Net cash provided by operating activities	16,147			(91		)	16,056
Repurchases of common stock	$	(10,976	)	$	91		$	(10,885	)
Net cash used in financing activities	(4,972		)	91			(4,881		)
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Deferred income taxes	4,084			142			4,226
Accounts receivable and unbilled revenue	1,809			(4,460		)	(2,651		)
Inventories	1,690			4,665			6,355
Prepaid expenses and other assets	2,442			(10,648		)	(8,206		)
Accounts payable	(48,955		)	10,547			(38,408		)
Accrued expenses and other liabilities	12,759			174			12,933
Net cash provided by operating activities	10,525			—			10,525

Condensed consolidated statements of income (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Revenue	$	264,405		$	270,461
Cost of goods sold	199,701			208,935
Gross profit	64,704			61,526
Operating expenses:
Selling, general and administrative expenses	53,615			51,477
Depreciation and amortization	2,904			4,596
Change in fair value of contingent consideration	(1,040		)	1,911
Restructuring charges	—			3,344
Income (loss) from operations	9,225			198
Other income (expense):
Interest income	34			14
Interest expense	(1,003		)	(1,077		)
Other, net	(224		)	(161		)
Total other expense	(1,193		)	(1,224		)
Income (loss) before taxes	8,032			(1,026		)
Income tax expense	2,354			2,110
Net income (loss)	$	5,678		$	(3,136	)
Basic earnings (loss) per share	$	0.11		$	(0.06	)
Diluted earnings (loss) per share	$	0.10		$	(0.06	)
Comprehensive income (loss)	$	7,657		$	(3,411	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	280,066		$	272,212		$	544,471		$	542,673
Cost of goods sold	210,020			206,232			409,721			415,167
Gross profit	70,046			65,980			134,750			127,506
Operating expenses:
Selling, general and administrative expenses	55,054			51,622			108,669			103,099
Depreciation and amortization	3,182			4,720			6,086			9,316
Change in fair value of contingent consideration	1,884			7,276			844			9,187
Restructuring charges	—			623			—			3,967
Income from operations	9,926			1,739			19,151			1,937
Other income (expense):
Interest income	12			24			46			38
Interest expense	(1,038		)	(985		)	(2,041		)	(2,062		)
Other, net	(1,164		)	291			(1,388		)	130
Total other expense	(2,190		)	(670		)	(3,383		)	(1,894		)
Income before taxes	7,736			1,069			15,768			42
Income tax expense	3,362			2,974			5,716			5,084
Net income (loss)	$	4,374		$	(1,905	)	$	10,052		$	(5,043	)
Basic earnings (loss) per share	$	0.08		$	(0.04	)	$	0.19		$	(0.09	)
Diluted earnings (loss) per share	$	0.08		$	(0.04	)	$	0.18		$	(0.09	)
Comprehensive income (loss)	$	8,253		$	(3,295	)	$	15,911		$	(6,708	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	288,523		$	276,002		$	832,994		$	818,675
Cost of goods sold	216,602			209,421			626,323			624,588
Gross profit	71,921			66,581			206,671			194,087
Operating expenses:
Selling, general and administrative expenses	57,186			52,466			165,855			155,565
Depreciation and amortization	3,317			5,066			9,403			14,382
Change in fair value of contingent consideration	(167		)	788			677			9,975
Restructuring charges	—			465			—			4,433
Income from operations	11,585			7,796			30,736			9,732
Other income (expense):
Interest income	31			26			77			63
Interest expense	(1,198		)	(1,190		)	(3,239		)	(3,252		)
Other, net	426			(114		)	(962		)	16
Total other expense	(741		)	(1,279		)	(4,124		)	(3,173		)
Income before taxes	10,844			6,517			26,612			6,559
Income tax expense	3,728			2,292			9,444			7,376
Net income (loss)	$	7,116		$	4,225		$	17,168		$	(817	)
Basic earnings (loss) per share	$	0.13		$	0.08		$	0.32		$	(0.02	)
Diluted earnings (loss) per share	$	0.13		$	0.08		$	0.31		$	(0.02	)
Comprehensive income (loss)	$	9,284		$	4,024		$	25,196		$	(2,683	)

Quarterly financial data (unaudited)

	Three Months Ended December 31, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	270,418	$	5,309		$	275,727
Gross profit	68,727		(250		)	68,477
Net income	5,047		(282		)	4,765
Net income per share:
Basic	0.09		—			0.09
Diluted	0.09		—			0.09

	Three Months Ended December 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	300,950	$	4,417		$	305,367
Gross profit	71,311		(2,524		)	68,787
Net income (loss)	1,500		(2,238		)	(738		)
Net income (loss) per share:
Basic	0.03		(0.04		)	(0.01		)
Diluted	0.03		(0.04		)	(0.01		)

Condensed consolidated balance sheets (unaudited)

	March 31, 2017			June 30, 2017			September 30, 2017
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	29,920		$	23,537		$	27,682
Accounts receivable, net of allowance for doubtful accounts of $2,504, $2,466 and $2,692 respectively	184,713			206,242			200,799
Unbilled revenue	33,771			34,264			48,645
Inventories	36,674			34,558			54,174
Prepaid expenses	23,912			23,588			22,018
Other current assets	20,302			20,475			31,529
Total current assets	329,292			342,664			384,847
Property and equipment, net	34,000			36,030			37,212
Intangibles and other assets:
Goodwill	203,269			205,399			206,704
Intangible assets, net	30,452			29,699			28,745
Deferred income taxes	1,440			1,281			1,432
Other non-current assets	1,633			1,547			1,592
Total intangibles and other assets	236,794			237,926			238,473
Total assets	$	600,086		$	616,620		$	660,532
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	114,616			126,382			130,406
Current portion of contingent consideration	17,165			—			—
Due to seller	1,093			17,842			—
Other current liabilities	24,359			25,210			30,416
Deferred revenue	16,885			15,392			15,709
Accrued expenses	32,422			27,409			32,889
Total current liabilities	206,540			212,235			209,420
Revolving credit facility	113,691			118,658			149,184
Deferred income taxes	9,818			9,876			9,839
Other long-term liabilities	2,697			2,625			2,595
Total liabilities	332,746			343,394			371,038
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 63,438, 63,808 and 63,964 shares issued, 53,565, 53,500 and 53,037 shares outstanding, respectively	6			6			6
Additional paid-in capital	228,106			230,030			232,979
Treasury stock at cost, 9,872, 10,308 and 9,927 shares, respectively	(54,949		)	(59,224		)	(54,938		)
Accumulated other comprehensive loss	(18,970		)	(15,090		)	(12,922		)
Retained earnings	113,147			117,504			124,369
Total stockholders' equity	267,340			273,226			289,494
Total liabilities and stockholders' equity	$	600,086		$	616,620		$	660,532

	March 31, 2016			June 30, 2016			September 30, 2016
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	20,929		$	31,606		$	20,787
Accounts receivable, net of allowance for doubtful accounts of $1,759, $1,609 and $2,218, respectively	196,251			188,247			185,659
Unbilled revenue	32,457			29,202			37,982
Inventories	42,350			43,528			52,830
Prepaid expenses	12,524			11,712			11,551
Other current assets	16,699			17,738			31,302
Total current assets	321,210			322,033			340,111
Property and equipment, net	33,208			33,089			32,279
Intangibles and other assets:
Goodwill	206,069			204,897			204,978
Intangible assets, net	36,577			34,831			33,476
Deferred income taxes	788			882			1,123
Other non-current assets	1,469			1,415			1,426
Total intangibles and other assets	244,903			242,025			241,003
Total assets	$	599,321		$	597,148		$	613,393
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	129,894			139,914			129,869
Current portion of contingent consideration	11,131			3,862			19,320
Due to seller	3,604			8,527			1,683
Other current liabilities	24,401			24,200			25,760
Deferred revenue	14,589			15,180			13,409
Accrued expenses	23,939			16,096			20,788
Total current liabilities	207,558			207,779			210,829
Revolving credit facility	118,615			111,566			133,734
Deferred income taxes	9,652			11,061			10,622
Contingent consideration, net of current portion	9,188			14,699			—
Other long-term liabilities	3,129			2,995			2,591
Total liabilities	348,142			348,100			357,776
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 62,867, 63,086 and 63,274 shares issued, 53,321, 53,583 and 53,770 shares outstanding, respectively	6			6			6
Additional paid-in capital	215,723			216,540			219,085
Treasury stock at cost, 9,547, 9,503 and 9,504 shares, respectively	(52,207		)	(51,724		)	(51,724		)
Accumulated other comprehensive loss	(14,077		)	(15,467		)	(15,668		)
Retained earnings	101,734			99,693			103,918
Total stockholders' equity	251,179			249,048			255,617
Total liabilities and stockholders' equity	$	599,321		$	597,148		$	613,393

Condensed consolidated statements of cash flows (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	5,678		$	(3,136	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	2,904			4,596
Stock-based compensation expense	1,419			1,241
Deferred income taxes	478			(546		)
Change in fair value of contingent consideration liability	(1,040		)	1,911
Bad debt provision	175			656
Other operating activities	52			52
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(4,680		)	(15,863		)
Inventories	(226		)	453
Prepaid expenses and other assets	(1,167		)	5,968
Change in liabilities, net of acquisitions:
Accounts payable	(8,396		)	(31,526		)
Accrued expenses and other liabilities	4,923			11,627
Net cash used in operating activities	120			(24,566		)
Cash flows from investing activities
Purchases of property and equipment	(3,042		)	(3,987		)
Net cash used in investing activities	(3,042		)	(3,987		)
Cash flows from financing activities
Net borrowings of revolving credit facility	6,519			19,358
Net short-term secured repayments	(801		)	(1,803		)
Repurchases of common stock	(4,342		)	—
Payments of contingent consideration	—			(525		)
Proceeds from exercise of stock options	189			984
Other financing activities	(95		)	382
Net cash provided by in financing activities	1,470			18,396
Effect of exchange rate changes on cash and cash equivalents	448			331
Decrease in cash and cash equivalents	(1,004		)	(9,826		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	29,920		$	20,929

	Six Months Ended June 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	10,052		$	(5,043	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	6,086			9,316
Stock-based compensation expense	2,921			2,358
Deferred income taxes	624			557
Change in fair value of contingent consideration liability	844			9,187
Intangible asset impairment charges	—			789
Bad debt provision	82			—
Other operating activities	104			105
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(26,620		)	(4,738		)
Inventories	1,890			(725		)
Prepaid expenses and other assets	(971		)	5,742
Change in liabilities, net of acquisitions:
Accounts payable	3,370			(21,506		)
Accrued expenses and other liabilities	(69		)	3,110
Net cash used in operating activities	(1,687		)	(848		)
Cash flows from investing activities
Purchases of property and equipment	(7,024		)	(7,445		)
Net cash used in investing activities	(7,024		)	(7,445		)
Cash flows from financing activities
Net borrowings of revolving credit facility	11,491			12,553
Net short-term secured borrowings	37			104
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(2,089		)	(4,144		)
Proceeds from exercise of stock options	1,319			1,090
Other financing activities	(119		)	(474		)
Net cash provided by in financing activities	598			9,129
Effect of exchange rate changes on cash and cash equivalents	726			15
(Decrease) increase in cash and cash equivalents	(7,387		)	851
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	23,537			31,606

	Nine Months Ended September 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	17,168		$	(817	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	9,403			14,382
Stock-based compensation expense	5,296			4,097
Deferred income taxes	448			372
Change in fair value of contingent consideration liability	677			9,975
Bad debt provision	268			1,433
Other operating activities	157			156
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(35,732		)	(11,573		)
Inventories	(17,726		)	(10,027		)
Prepaid expenses and other assets	(10,567		)	(7,622		)
Change in liabilities, net of acquisitions:
Accounts payable	7,395			(31,551		)
Accrued expenses and other liabilities	10,830			7,543
Net cash used in operating activities	(12,383		)	(23,632		)
Cash flows from investing activities
Purchases of property and equipment	(10,274		)	(10,502		)
Net cash used in investing activities	(10,274		)	(10,502		)
Cash flows from financing activities
Net borrowings of revolving credit facility	42,258			34,722
Net short-term secured borrowings (repayments)	633			(820		)
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(15,345		)	(11,008		)
Proceeds from exercise of stock options	1,824			2,002
Other financing activities	(850		)	(680		)
Net cash provided by in financing activities	18,479			24,216
Effect of exchange rate changes on cash and cash equivalents	936			(50		)
Decrease in cash and cash equivalents	(3,242		)	(9,968		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	27,682		$	20,787

Restated and revised consolidated statements of income amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	267,390	$	(2,985	)	$	264,405
Cost of goods sold	203,113		(3,412		)	199,701
Gross profit	64,277		427			64,704
Selling, general and administrative expenses	53,427		188			53,615
Income from operations	8,986		239			9,225
Income before taxes	7,793		239			8,032
Income tax expense	2,337		17			2,354
Net income	5,456		222			5,678
Basic earnings per share	0.10		0.01			0.11
Diluted earnings per share	0.10		—			0.10
Comprehensive income	7,435		222			7,657

	Three Months Ended March 31, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	271,073		$	(612	)	$	270,461
Cost of goods sold	209,127			(192		)	208,935
Gross profit	61,946			(420		)	61,526
Selling, general and administrative expenses	51,492			(15		)	51,477
Income from operations	603			(405		)	198
Loss before taxes	(621		)	(405		)	(1,026		)
Income tax expense	2,072			38			2,110
Net loss	(2,693		)	(443		)	(3,136		)
Basic loss per share	(0.05		)	(0.01		)	(0.06		)
Diluted loss per share	(0.05		)	(0.01		)	(0.06		)
Comprehensive loss	(3,163		)	(248		)	(3,411		)

	Three Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,530	$	536		$	280,066
Cost of goods sold	209,303		717			210,020
Gross profit	70,227		(181		)	70,046
Selling, general and administrative expenses	55,086		(32		)	55,054
Income from operations	10,075		(149		)	9,926
Income before taxes	7,884		(149		)	7,736
Income tax expense	3,391		(29		)	3,362
Net income	4,493		(120		)	4,374
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	8,373		(120		)	8,253

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	546,920	$	(2,449	)	$	544,471
Cost of goods sold	412,416		(2,695		)	409,721
Gross profit	134,504		246			134,750
Selling, general and administrative expenses	108,513		156			108,669
Income from operations	19,061		90			19,151
Income before taxes	15,678		90			15,768
Income tax expense	5,727		(11		)	5,716
Net income	9,951		101			10,052
Basic earnings per share	0.19		—			0.19
Diluted earnings per share	0.18		—			0.18
Comprehensive income	15,810		101			15,911

	Three Months Ended June 30, 2016
	As Previously Reported			Adjustments		As Restated
Revenue	$	269,220		$	2,992	$	272,212
Cost of goods sold	204,126			2,106		206,232
Gross profit	65,093			886		65,980
Selling, general and administrative expenses	51,418			203		51,622
Income from operations	1,056			683		1,739
Income before taxes	386			683		1,069
Income tax expense	2,710			264		2,974
Net loss	(2,324		)	419		(1,905		)
Basic loss per share	(0.04		)	—		(0.04		)
Diluted loss per share	(0.04		)	—		(0.04		)
Comprehensive loss	(3,714		)	419		(3,295		)

	Six Months Ended June 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	540,292		$	2,381		$	542,673
Cost of goods sold	413,253			1,914			415,167
Gross profit	127,039			467			127,506
Selling, general and administrative expenses	102,910			189			103,099
Income from operations	1,659			278			1,937
Income (loss) before taxes	(235		)	277			42
Income tax expense	4,782			302			5,084
Net loss	(5,017		)	(26		)	(5,043		)
Basic loss per share	(0.09		)	—			(0.09		)
Diluted loss per share	(0.09		)	—			(0.09		)
Comprehensive loss	(6,877		)	169			(6,708		)

	Three Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	288,386	$	137		$	288,523
Cost of goods sold	215,867		735			216,602
Gross profit	72,519		(598		)	71,921
Selling, general and administrative expenses	57,134		52			57,186
Income from operations	12,236		(649		)	11,585
Income before taxes	11,495		(650		)	10,844
Income tax expense	3,967		(239		)	3,728
Net income	7,528		(411		)	7,116
Basic earnings per share	0.14		(0.01		)	0.13
Diluted earnings per share	0.14		(0.01		)	0.13
Comprehensive income	9,696		(411		)	9,284

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	835,306	$	(2,312	)	$	832,994
Cost of goods sold	628,282		(1,959		)	626,323
Gross profit	207,024		(353		)	206,671
Selling, general and administrative expenses	165,647		208			165,855
Income from operations	31,297		(561		)	30,736
Income before taxes	27,173		(562		)	26,612
Income tax expense	9,694		(250		)	9,444
Net income	17,479		(311		)	17,168
Basic earnings per share	0.32		—			0.32
Diluted earnings per share	0.32		(0.01		)	0.31
Comprehensive income	25,506		(311		)	25,196

	Three Months Ended September 30, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,993	$	(3,991	)	$	276,002
Cost of goods sold	212,212		(2,791		)	209,421
Gross profit	67,781		(1,200		)	66,581
Selling, general and administrative expenses	52,601		(135		)	52,466
Income from operations	8,860		(1,064		)	7,796
Income before taxes	7,581		(1,064		)	6,517
Income tax expense	3,240		(948		)	2,292
Net income	4,341		(116		)	4,225
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	4,140		(116		)	4,024

	Nine Months Ended September 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	820,286		$	(1,611	)	$	818,675
Cost of goods sold	625,465			(877		)	624,588
Gross profit	194,821			(734		)	194,087
Selling, general and administrative expenses	155,511			54			155,565
Income from operations	10,520			(788		)	9,732
Income before taxes	7,347			(788		)	6,559
Income tax expense	8,023			(647		)	7,376
Net loss	(676		)	(141		)	(817		)
Basic loss per share	(0.01		)	(0.01		)	(0.02		)
Diluted loss per share	(0.01		)	(0.01		)	(0.02		)
Comprehensive loss	(2,201		)	(482		)	(2,683		)

Restated and revised consolidated balance sheet amounts (unaudited)

	As of March 31, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	187,028		(2,315	)	184,713
Unbilled revenue	35,712		(1,941	)	33,771
Inventories	30,338		6,336		36,674
Other current assets	20,598		(296	)	20,302
Total current assets	327,508		1,784		329,292
Other non-current assets	1,353		280		1,633
Total other assets	236,514		280		236,794
Total assets	598,022		2,064		600,086
Accounts payable	114,399		217		114,616
Accrued expenses	32,547		(125	)	32,422
Other current liabilities	25,231		(872	)	24,359
Deferred revenue	12,405		4,480		16,885
Total current liabilities	202,840		3,700		206,540
Deferred income taxes	9,848		(30	)	9,818
Other long-term liabilities	2,060		637		2,697
Total liabilities	328,439		4,307		332,746
Accumulated other comprehensive loss	(18,820	)	(150	)	(18,970	)
Retained earnings	115,240		(2,093	)	113,147
Total stockholders' equity	269,583		(2,243	)	267,340
Total liabilities and stockholders' equity	598,022		2,064		600,086

	As of June 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	208,382		(2,140	)	206,242
Unbilled revenue	36,515		(2,251	)	34,264
Inventories	28,192		6,366		34,558
Other current assets	20,949		(474	)	20,475
Total current assets	341,163		1,501		342,664
Other non-current assets	1,267		280		1,547
Total intangibles and other assets	237,646		280		237,926
Total assets	614,839		1,781		616,620
Accounts payable	125,593		789		126,382
Accrued expenses	27,567		(158	)	27,409
Other current liabilities	26,163		(953	)	25,210
Deferred revenue	11,585		3,807		15,392
Total current liabilities	208,750		3,485		212,235
Deferred income taxes	9,852		24		9,876
Other long-term liabilities	1,988		637		2,625
Total liabilities	339,248		4,146		343,394
Accumulated other comprehensive loss	(14,940	)	(150	)	(15,090	)
Retained earnings	119,719		(2,215	)	117,504
Total stockholders' equity	275,591		(2,365	)	273,226
Total liabilities and stockholders' equity	614,839		1,781		616,620

	As of September 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	203,306		(2,507	)	200,799
Unbilled revenue	50,130		(1,485	)	48,645
Inventories	48,744		5,430		54,174
Other current assets	31,850		(321	)	31,529
Total current assets	383,730		1,117		384,847
Other non-current assets	1,312		280		1,592
Total intangibles and other assets	238,193		280		238,473
Total assets	659,135		1,397		660,532
Accounts payable	129,600		806		130,406
Accrued expenses	32,994		(105	)	32,889
Other current liabilities	31,589		(1,173	)	30,416
Deferred revenue	11,707		4,002		15,709
Total current liabilities	205,890		3,530		209,420
Deferred income taxes	9,834		5		9,839
Other long-term liabilities	1,958		637		2,595
Total liabilities	366,866		4,172		371,038
Accumulated other comprehensive loss	(12,772	)	(150	)	(12,922	)
Retained earnings	126,994		(2,625	)	124,369
Total stockholders' equity	292,269		(2,775	)	289,494
Total liabilities and stockholders' equity	659,135		1,397		660,532

	As of March 31, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	200,629		(4,378	)	196,251
Unbilled revenue	34,548		(2,091	)	32,457
Inventories	34,715		7,635		42,350
Prepaid expenses	12,957		(433	)	12,524
Other current assets	16,708		(8	)	16,699
Total current assets	320,485		725		321,210
Total assets	598,596		725		599,321
Accounts payable	130,048		(154	)	129,894
Accrued expenses	24,257		(318	)	23,939
Deferred revenue	10,975		3,614		14,589
Total current liabilities	204,416		3,142		207,558
Deferred income taxes	10,476		(824	)	9,652
Other long-term liabilities	2,772		358		3,129
Total liabilities	345,466		2,676		348,142
Accumulated other comprehensive loss	(14,463	)	386		(14,077	)
Retained earnings	104,071		(2,337	)	101,734
Total stockholders' equity	253,130		(1,951	)	251,179
Total liabilities and stockholders' equity	598,596		725		599,321

	As of June 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	193,297		(5,050	)	188,247
Unbilled revenue	27,857		1,345		29,202
Inventories	35,901		7,627		43,528
Prepaid expenses	12,145		(433	)	11,712
Other current assets	17,647		92		17,738
Total current assets	318,453		3,580		322,033
Total assets	593,567		3,582		597,148
Accounts payable	136,260		3,654		139,914
Accrued expenses	17,818		(1,722	)	16,096
Deferred revenue	11,793		3,387		15,180
Total current liabilities	202,460		5,319		207,779
Deferred income taxes	11,620		(559	)	11,061
Other long-term liabilities	2,639		356		2,995
Total liabilities	342,984		5,116		348,100
Accumulated other comprehensive loss	(15,853	)	386		(15,467	)
Retained earnings	101,614		(1,921	)	99,693
Total stockholders' equity	250,583		(1,535	)	249,048
Total liabilities and stockholders' equity	593,567		3,581		597,148

	As of September 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	190,438		(4,779	)	185,659
Unbilled revenue	40,505		(2,523	)	37,982
Inventories	45,377		7,453		52,830
Prepaid expenses	11,984		(433	)	11,551
Other current assets	30,528		774		31,302
Total current assets	339,619		492		340,111
Total assets	612,901		492		613,393
Accounts payable	129,980		(111	)	129,869
Accrued expenses	21,037		(249	)	20,788
Deferred revenue	9,755		3,654		13,409
Total current liabilities	207,535		3,294		210,829
Deferred income taxes	11,594		(972	)	10,622
Other long-term liabilities	2,235		356		2,591
Total liabilities	355,098		2,678		357,776
Accumulated other comprehensive loss	(15,518	)	(150	)	(15,668	)
Retained earnings	105,954		(2,036	)	103,918
Total stockholders' equity	257,803		(2,186	)	255,617
Total liabilities and stockholders' equity	612,901		492		613,393

Restated and revised consolidated statement of cash flow amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments		As Restated
Net income	5,456		222		5,678
Deferred income taxes	(16	)	494		478
Accounts receivable and unbilled revenue	(7,318	)	2,638		(4,680	)
Inventories	1,300		(1,526	)	(226	)
Prepaid expenses and other assets	(979	)	(188	)	(1,167	)
Accounts payable	(6,890	)	(1,506	)	(8,396	)
Accrued expenses and other liabilities	5,057		(134	)	4,923
Net cash provided by operating activities	120		—		120

	Three Months Ended March 31, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(2,693	)	(443	)	(3,136	)
Deferred income taxes	(389	)	(157	)	(546	)
Accounts receivable and unbilled revenue	(16,256	)	393		(15,863	)
Inventories	(1,388	)	1,841		453
Prepaid expenses and other assets	16,382		(10,414	)	5,968
Accounts payable	(40,196	)	8,670		(31,526	)
Accrued expenses and other liabilities	11,518		109		11,627
Net cash used in operating activities	(24,566	)	—		(24,566	)

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	9,951		101		10,052
Deferred income taxes	76		548		624
Accounts receivable and unbilled revenue	(29,395	)	2,775		(26,620	)
Inventories	3,446		(1,556	)	1,890
Prepaid expenses and other assets	(957	)	(14	)	(971	)
Accounts payable	4,304		(934	)	3,370
Accrued expenses and other liabilities	851		(920	)	(69	)
Net cash used in operating activities	(1,687	)	—		(1,687	)

	Six Months Ended June 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(5,017	)	(26	)	(5,043	)
Deferred income taxes	450		107		557
Accounts receivable and unbilled revenue	(2,366	)	(2,372	)	(4,738	)
Inventories	(2,573	)	1,848		(725	)
Prepaid expenses and other assets	16,255		(10,513	)	5,742
Accounts payable	(33,984	)	12,478		(21,506	)
Accrued expenses and other liabilities	4,632		(1,522	)	3,110
Net cash used in operating activities	(848	)	—		(848	)

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	17,479		(311	)	17,168
Deferred income taxes	(82	)	530		448
Accounts receivable and unbilled revenue	(38,108	)	2,376		(35,732	)
Inventories	(17,106	)	(620	)	(17,726	)
Prepaid expenses and other assets	(10,401	)	(166	)	(10,567	)
Accounts payable	8,312		(917	)	7,395
Accrued expenses and other liabilities	11,722		(891	)	10,830
Net cash used in operating activities	(12,383	)	—		(12,383	)

	Nine Months Ended September 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(676	)	(141	)	(817	)
Deferred income taxes	677		(305	)	372
Accounts receivable and unbilled revenue	(12,798	)	1,225		(11,573	)
Inventories	(12,050	)	2,023		(10,027	)
Prepaid expenses and other assets	3,574		(11,196	)	(7,622	)
Accounts payable	(40,264	)	8,713		(31,551	)
Accrued expenses and other liabilities	7,861		(318	)	7,543
Net cash used in operating activities	(23,632	)	—		(23,632	)

XML

Restatement and Revision of Prior Period Quarterly Financial Statements (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

Revised condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments		As Revised
Year Ended December 31, 2015:
Revenue	1,029,353		(461	)	1,028,892
Cost of goods sold	789,159		(297	)	788,862
Gross profit	240,194		(164	)	240,030
Selling, general and administrative	197,291		(44	)	197,247
Loss from operations	(13,093	)	(120	)	(13,213	)
Loss before taxes	(20,771	)	(120	)	(20,891	)
Income tax expense	12,292		(794	)	11,498
Net loss	(33,063	)	674		(32,389	)
Basic loss per share	(0.63	)	0.02		(0.61	)
Diluted loss per share	(0.63	)	0.02		(0.61	)

Revised condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported		Adjustments	As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674	(32,389	)
Comprehensive loss	(41,655	)	1,015	(40,640	)

Revised condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported		Adjustments^		As Revised
Year Ended December 31, 2015:
Net loss	(33,063	)	674		(32,389	)
Bad debt provision	1,949		(264	)	1,685
Deferred income taxes	6,947		(1,068	)	5,879
Accounts receivable and unbilled revenue	(10,361	)	(219	)	(10,580	)
Inventories	(8,188	)	(1,488	)	(9,676	)
Prepaid expenses and other assets	(6,138	)	1,998		(4,140	)
Accounts payable	26,199		(1,097	)	25,102
Accrued expenses and other liabilities	2,118		1,464		3,582
Net cash provided by operating activities	43,402		—		43,402

Restated condensed consolidated statements of income amounts (in thousands), except per share data

	As Previously Reported		Adjustments				As Restated
Year Ended December 31, 2017:
Revenue	$	1,136,256	$	2,105		(b)(c)(d)	$	1,138,361
Cost of goods sold	857,921		4,982			(a)(b)(c)	862,903
Gross profit	278,335		(2,877		)		275,458
Selling, general and administrative	225,738		1,515			(e)	227,253
Income from operations	38,530		(4,392		)		34,138
Income before taxes	32,110		(4,392		)		27,718
Income tax expense	13,131		(1,843		)	*	11,288
Net income	18,979		(2,549		)		16,430
Basic earnings per share	$	0.35	$	(0.04	)		$	0.31
Diluted earnings per share	$	0.35	$	(0.05	)		$	0.30
Year Ended December 31, 2016:
Revenue	$	1,090,704	$	3,698		(b)(c)	$	1,094,402
Cost of goods sold	827,156		4,682			(b)(c)	831,838
Gross profit	263,548		(984		)		262,564
Selling, general and administrative	209,967		(443		)	(e)	209,524
Income from operations	19,563		(541		)		19,022
Income before taxes	15,325		(542		)		14,783
Income tax expense	10,955		(121		)	*	10,834
Net income	4,370		(421		)		3,949
Basic earnings per share	$	0.08	$	(0.01	)		$	0.07
Diluted earnings per share	$	0.08	$	(0.01	)		$	0.07

* The adjustment to income tax expense for the years ended December 31, 2017 and 2016 primarily relates to the tax effect of the adjustments summarized above.

Restated condensed consolidated statements of comprehensive income amounts (in thousands)

	As Previously Reported			Adjustments			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Comprehensive income	20,697			(2,547		)	18,150
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Comprehensive loss	(2,436		)	(762		)	(3,198		)

Restated condensed consolidated balance sheet amounts (in thousands)

	As Previously Reported			Adjustments				As Restated
As of December 31, 2017:
Accounts receivable	$	206,712		$	(1,326	)		$	205,386
Unbilled revenue	49,389			627			(d)	50,016
Inventories	34,807			5,887			(b)(c)	40,694
Prepaid expenses	19,638			(1,073		)		18,565
Other current assets	32,694			5,171			**	37,865
Total current assets	373,802			9,286				383,088
Deferred income taxes	612			79				691
Other non-current assets	1,382			254				1,636
Total intangibles and other assets	229,503			333				229,836
Total assets	640,019			9,619				649,638
Accounts payable	$	134,609		$	6,555		(a)(b)(d)	$	141,164
Accrued expenses	33,694			697				34,391
Other current liabilities	20,956			3,122			**	24,078
Deferred revenue	13,685			3,935			(c)	17,620
Total current liabilities	202,943			14,310				217,253
Deferred income taxes	12,348			(305		)		12,043
Other long-term liabilities	6,771			628				7,399
Total liabilities	350,461			14,632				365,093
Accumulated other comprehensive loss	$	(19,079	)	$	(150	)		$	(19,229	)
Retained earnings	129,305			(4,863		)		124,442
Total stockholders' equity	289,559			(5,014		)		284,545
Total liabilities and stockholders' equity	640,019			9,619				649,638
As of December 31, 2016:
Accounts receivable	$	182,874		$	(410	)		$	182,464
Unbilled revenue	32,723			(1,207		)	(b)(d)	31,516
Inventories	31,638			4,810			(b)(c)	36,448
Prepaid expenses	18,772			(313		)		18,459
Other current assets	24,769			(172		)		24,597
Total current assets	321,700			2,708				324,408
Other non-current assets	1,374			280				1,654
Total intangibles and other assets	236,642			280				236,923
Total assets	590,999			2,988				593,987
Accounts payable	$	121,289		$	1,723		(a)(d)	$	123,012
Accrued expenses	30,068			(313		)		29,755
Other current liabilities	22,971			(395		)		22,576
Deferred revenue	12,078			4,324			(c)	16,402
Total current liabilities	205,688			5,340				211,028
Deferred income taxes	11,291			(525		)		10,766
Other long-term liabilities	1,926			638				2,564
Total liabilities	326,373			5,453				331,826

Accumulated other comprehensive loss	$	(20,799	)	$	(150	)	$	(20,949	)
Retained earnings	110,397			(2,315		)	108,082
Total stockholders' equity	264,626			(2,465		)	262,161
Total liabilities and stockholders' equity	590,999			2,988			593,987

** The changes in Other current assets and Other current liabilities as of December 31, 2017 primarily relate to netting adjustments to income tax accounts.

Restated condensed consolidated statements of cash flow amounts (in thousands)

	As Previously Reported			Adjustments***			As Restated
Year Ended December 31, 2017:
Net income	$	18,979		$	(2,549	)	$	16,430
Deferred income taxes	3,744			328			4,072
Accounts receivable and unbilled revenue	(40,959		)	(918		)	(41,877		)
Inventories	(3,169		)	(1,076		)	(4,245		)
Prepaid expenses and other assets	(8,989		)	(4,558		)	(13,547		)
Accounts payable	13,320			4,832			18,152
Accrued expenses and other liabilities	11,670			3,850			15,520
Net cash provided by operating activities	16,147			(91		)	16,056
Repurchases of common stock	$	(10,976	)	$	91		$	(10,885	)
Net cash used in financing activities	(4,972		)	91			(4,881		)
Year Ended December 31, 2016:
Net income	$	4,370		$	(421	)	$	3,949
Deferred income taxes	4,084			142			4,226
Accounts receivable and unbilled revenue	1,809			(4,460		)	(2,651		)
Inventories	1,690			4,665			6,355
Prepaid expenses and other assets	2,442			(10,648		)	(8,206		)
Accounts payable	(48,955		)	10,547			(38,408		)
Accrued expenses and other liabilities	12,759			174			12,933
Net cash provided by operating activities	10,525			—			10,525

Condensed consolidated statements of income (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Revenue	$	264,405		$	270,461
Cost of goods sold	199,701			208,935
Gross profit	64,704			61,526
Operating expenses:
Selling, general and administrative expenses	53,615			51,477
Depreciation and amortization	2,904			4,596
Change in fair value of contingent consideration	(1,040		)	1,911
Restructuring charges	—			3,344
Income (loss) from operations	9,225			198
Other income (expense):
Interest income	34			14
Interest expense	(1,003		)	(1,077		)
Other, net	(224		)	(161		)
Total other expense	(1,193		)	(1,224		)
Income (loss) before taxes	8,032			(1,026		)
Income tax expense	2,354			2,110
Net income (loss)	$	5,678		$	(3,136	)
Basic earnings (loss) per share	$	0.11		$	(0.06	)
Diluted earnings (loss) per share	$	0.10		$	(0.06	)
Comprehensive income (loss)	$	7,657		$	(3,411	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	280,066		$	272,212		$	544,471		$	542,673
Cost of goods sold	210,020			206,232			409,721			415,167
Gross profit	70,046			65,980			134,750			127,506
Operating expenses:
Selling, general and administrative expenses	55,054			51,622			108,669			103,099
Depreciation and amortization	3,182			4,720			6,086			9,316
Change in fair value of contingent consideration	1,884			7,276			844			9,187
Restructuring charges	—			623			—			3,967
Income from operations	9,926			1,739			19,151			1,937
Other income (expense):
Interest income	12			24			46			38
Interest expense	(1,038		)	(985		)	(2,041		)	(2,062		)
Other, net	(1,164		)	291			(1,388		)	130
Total other expense	(2,190		)	(670		)	(3,383		)	(1,894		)
Income before taxes	7,736			1,069			15,768			42
Income tax expense	3,362			2,974			5,716			5,084
Net income (loss)	$	4,374		$	(1,905	)	$	10,052		$	(5,043	)
Basic earnings (loss) per share	$	0.08		$	(0.04	)	$	0.19		$	(0.09	)
Diluted earnings (loss) per share	$	0.08		$	(0.04	)	$	0.18		$	(0.09	)
Comprehensive income (loss)	$	8,253		$	(3,295	)	$	15,911		$	(6,708	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	(as restated)			(as restated)			(as restated)			(as restated)
Revenue	$	288,523		$	276,002		$	832,994		$	818,675
Cost of goods sold	216,602			209,421			626,323			624,588
Gross profit	71,921			66,581			206,671			194,087
Operating expenses:
Selling, general and administrative expenses	57,186			52,466			165,855			155,565
Depreciation and amortization	3,317			5,066			9,403			14,382
Change in fair value of contingent consideration	(167		)	788			677			9,975
Restructuring charges	—			465			—			4,433
Income from operations	11,585			7,796			30,736			9,732
Other income (expense):
Interest income	31			26			77			63
Interest expense	(1,198		)	(1,190		)	(3,239		)	(3,252		)
Other, net	426			(114		)	(962		)	16
Total other expense	(741		)	(1,279		)	(4,124		)	(3,173		)
Income before taxes	10,844			6,517			26,612			6,559
Income tax expense	3,728			2,292			9,444			7,376
Net income (loss)	$	7,116		$	4,225		$	17,168		$	(817	)
Basic earnings (loss) per share	$	0.13		$	0.08		$	0.32		$	(0.02	)
Diluted earnings (loss) per share	$	0.13		$	0.08		$	0.31		$	(0.02	)
Comprehensive income (loss)	$	9,284		$	4,024		$	25,196		$	(2,683	)

Quarterly financial data (unaudited)

	Three Months Ended December 31, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	270,418	$	5,309		$	275,727
Gross profit	68,727		(250		)	68,477
Net income	5,047		(282		)	4,765
Net income per share:
Basic	0.09		—			0.09
Diluted	0.09		—			0.09

	Three Months Ended December 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	300,950	$	4,417		$	305,367
Gross profit	71,311		(2,524		)	68,787
Net income (loss)	1,500		(2,238		)	(738		)
Net income (loss) per share:
Basic	0.03		(0.04		)	(0.01		)
Diluted	0.03		(0.04		)	(0.01		)

Condensed consolidated balance sheets (unaudited)

	March 31, 2017			June 30, 2017			September 30, 2017
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	29,920		$	23,537		$	27,682
Accounts receivable, net of allowance for doubtful accounts of $2,504, $2,466 and $2,692 respectively	184,713			206,242			200,799
Unbilled revenue	33,771			34,264			48,645
Inventories	36,674			34,558			54,174
Prepaid expenses	23,912			23,588			22,018
Other current assets	20,302			20,475			31,529
Total current assets	329,292			342,664			384,847
Property and equipment, net	34,000			36,030			37,212
Intangibles and other assets:
Goodwill	203,269			205,399			206,704
Intangible assets, net	30,452			29,699			28,745
Deferred income taxes	1,440			1,281			1,432
Other non-current assets	1,633			1,547			1,592
Total intangibles and other assets	236,794			237,926			238,473
Total assets	$	600,086		$	616,620		$	660,532
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	114,616			126,382			130,406
Current portion of contingent consideration	17,165			—			—
Due to seller	1,093			17,842			—
Other current liabilities	24,359			25,210			30,416
Deferred revenue	16,885			15,392			15,709
Accrued expenses	32,422			27,409			32,889
Total current liabilities	206,540			212,235			209,420
Revolving credit facility	113,691			118,658			149,184
Deferred income taxes	9,818			9,876			9,839
Other long-term liabilities	2,697			2,625			2,595
Total liabilities	332,746			343,394			371,038
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 63,438, 63,808 and 63,964 shares issued, 53,565, 53,500 and 53,037 shares outstanding, respectively	6			6			6
Additional paid-in capital	228,106			230,030			232,979
Treasury stock at cost, 9,872, 10,308 and 9,927 shares, respectively	(54,949		)	(59,224		)	(54,938		)
Accumulated other comprehensive loss	(18,970		)	(15,090		)	(12,922		)
Retained earnings	113,147			117,504			124,369
Total stockholders' equity	267,340			273,226			289,494
Total liabilities and stockholders' equity	$	600,086		$	616,620		$	660,532

	March 31, 2016			June 30, 2016			September 30, 2016
	(as restated)			(as restated)			(as restated)
Assets
Current assets:
Cash and cash equivalents	$	20,929		$	31,606		$	20,787
Accounts receivable, net of allowance for doubtful accounts of $1,759, $1,609 and $2,218, respectively	196,251			188,247			185,659
Unbilled revenue	32,457			29,202			37,982
Inventories	42,350			43,528			52,830
Prepaid expenses	12,524			11,712			11,551
Other current assets	16,699			17,738			31,302
Total current assets	321,210			322,033			340,111
Property and equipment, net	33,208			33,089			32,279
Intangibles and other assets:
Goodwill	206,069			204,897			204,978
Intangible assets, net	36,577			34,831			33,476
Deferred income taxes	788			882			1,123
Other non-current assets	1,469			1,415			1,426
Total intangibles and other assets	244,903			242,025			241,003
Total assets	$	599,321		$	597,148		$	613,393
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	129,894			139,914			129,869
Current portion of contingent consideration	11,131			3,862			19,320
Due to seller	3,604			8,527			1,683
Other current liabilities	24,401			24,200			25,760
Deferred revenue	14,589			15,180			13,409
Accrued expenses	23,939			16,096			20,788
Total current liabilities	207,558			207,779			210,829
Revolving credit facility	118,615			111,566			133,734
Deferred income taxes	9,652			11,061			10,622
Contingent consideration, net of current portion	9,188			14,699			—
Other long-term liabilities	3,129			2,995			2,591
Total liabilities	348,142			348,100			357,776
Stockholders' equity:
Common stock, par value $0.0001 per share, 200,000, 200,000 and 200,000 shares authorized, 62,867, 63,086 and 63,274 shares issued, 53,321, 53,583 and 53,770 shares outstanding, respectively	6			6			6
Additional paid-in capital	215,723			216,540			219,085
Treasury stock at cost, 9,547, 9,503 and 9,504 shares, respectively	(52,207		)	(51,724		)	(51,724		)
Accumulated other comprehensive loss	(14,077		)	(15,467		)	(15,668		)
Retained earnings	101,734			99,693			103,918
Total stockholders' equity	251,179			249,048			255,617
Total liabilities and stockholders' equity	$	599,321		$	597,148		$	613,393

Condensed consolidated statements of cash flows (unaudited)

	Three Months Ended March 31,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	5,678		$	(3,136	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	2,904			4,596
Stock-based compensation expense	1,419			1,241
Deferred income taxes	478			(546		)
Change in fair value of contingent consideration liability	(1,040		)	1,911
Bad debt provision	175			656
Other operating activities	52			52
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(4,680		)	(15,863		)
Inventories	(226		)	453
Prepaid expenses and other assets	(1,167		)	5,968
Change in liabilities, net of acquisitions:
Accounts payable	(8,396		)	(31,526		)
Accrued expenses and other liabilities	4,923			11,627
Net cash used in operating activities	120			(24,566		)
Cash flows from investing activities
Purchases of property and equipment	(3,042		)	(3,987		)
Net cash used in investing activities	(3,042		)	(3,987		)
Cash flows from financing activities
Net borrowings of revolving credit facility	6,519			19,358
Net short-term secured repayments	(801		)	(1,803		)
Repurchases of common stock	(4,342		)	—
Payments of contingent consideration	—			(525		)
Proceeds from exercise of stock options	189			984
Other financing activities	(95		)	382
Net cash provided by in financing activities	1,470			18,396
Effect of exchange rate changes on cash and cash equivalents	448			331
Decrease in cash and cash equivalents	(1,004		)	(9,826		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	29,920		$	20,929

	Six Months Ended June 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	10,052		$	(5,043	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	6,086			9,316
Stock-based compensation expense	2,921			2,358
Deferred income taxes	624			557
Change in fair value of contingent consideration liability	844			9,187
Intangible asset impairment charges	—			789
Bad debt provision	82			—
Other operating activities	104			105
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(26,620		)	(4,738		)
Inventories	1,890			(725		)
Prepaid expenses and other assets	(971		)	5,742
Change in liabilities, net of acquisitions:
Accounts payable	3,370			(21,506		)
Accrued expenses and other liabilities	(69		)	3,110
Net cash used in operating activities	(1,687		)	(848		)
Cash flows from investing activities
Purchases of property and equipment	(7,024		)	(7,445		)
Net cash used in investing activities	(7,024		)	(7,445		)
Cash flows from financing activities
Net borrowings of revolving credit facility	11,491			12,553
Net short-term secured borrowings	37			104
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(2,089		)	(4,144		)
Proceeds from exercise of stock options	1,319			1,090
Other financing activities	(119		)	(474		)
Net cash provided by in financing activities	598			9,129
Effect of exchange rate changes on cash and cash equivalents	726			15
(Decrease) increase in cash and cash equivalents	(7,387		)	851
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	23,537			31,606

	Nine Months Ended September 30,
	2017			2016
	(as restated)			(as restated)
Cash flows from operating activities
Net income (loss)	$	17,168		$	(817	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	9,403			14,382
Stock-based compensation expense	5,296			4,097
Deferred income taxes	448			372
Change in fair value of contingent consideration liability	677			9,975
Bad debt provision	268			1,433
Other operating activities	157			156
Change in assets, net of acquisitions:
Accounts receivable and unbilled revenue	(35,732		)	(11,573		)
Inventories	(17,726		)	(10,027		)
Prepaid expenses and other assets	(10,567		)	(7,622		)
Change in liabilities, net of acquisitions:
Accounts payable	7,395			(31,551		)
Accrued expenses and other liabilities	10,830			7,543
Net cash used in operating activities	(12,383		)	(23,632		)
Cash flows from investing activities
Purchases of property and equipment	(10,274		)	(10,502		)
Net cash used in investing activities	(10,274		)	(10,502		)
Cash flows from financing activities
Net borrowings of revolving credit facility	42,258			34,722
Net short-term secured borrowings (repayments)	633			(820		)
Repurchases of common stock	(10,041		)	—
Payments of contingent consideration	(15,345		)	(11,008		)
Proceeds from exercise of stock options	1,824			2,002
Other financing activities	(850		)	(680		)
Net cash provided by in financing activities	18,479			24,216
Effect of exchange rate changes on cash and cash equivalents	936			(50		)
Decrease in cash and cash equivalents	(3,242		)	(9,968		)
Cash and cash equivalents, beginning of period	30,924			30,755
Cash and cash equivalents, end of period	$	27,682		$	20,787

Restated and revised consolidated statements of income amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	267,390	$	(2,985	)	$	264,405
Cost of goods sold	203,113		(3,412		)	199,701
Gross profit	64,277		427			64,704
Selling, general and administrative expenses	53,427		188			53,615
Income from operations	8,986		239			9,225
Income before taxes	7,793		239			8,032
Income tax expense	2,337		17			2,354
Net income	5,456		222			5,678
Basic earnings per share	0.10		0.01			0.11
Diluted earnings per share	0.10		—			0.10
Comprehensive income	7,435		222			7,657

	Three Months Ended March 31, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	271,073		$	(612	)	$	270,461
Cost of goods sold	209,127			(192		)	208,935
Gross profit	61,946			(420		)	61,526
Selling, general and administrative expenses	51,492			(15		)	51,477
Income from operations	603			(405		)	198
Loss before taxes	(621		)	(405		)	(1,026		)
Income tax expense	2,072			38			2,110
Net loss	(2,693		)	(443		)	(3,136		)
Basic loss per share	(0.05		)	(0.01		)	(0.06		)
Diluted loss per share	(0.05		)	(0.01		)	(0.06		)
Comprehensive loss	(3,163		)	(248		)	(3,411		)

	Three Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,530	$	536		$	280,066
Cost of goods sold	209,303		717			210,020
Gross profit	70,227		(181		)	70,046
Selling, general and administrative expenses	55,086		(32		)	55,054
Income from operations	10,075		(149		)	9,926
Income before taxes	7,884		(149		)	7,736
Income tax expense	3,391		(29		)	3,362
Net income	4,493		(120		)	4,374
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	8,373		(120		)	8,253

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	546,920	$	(2,449	)	$	544,471
Cost of goods sold	412,416		(2,695		)	409,721
Gross profit	134,504		246			134,750
Selling, general and administrative expenses	108,513		156			108,669
Income from operations	19,061		90			19,151
Income before taxes	15,678		90			15,768
Income tax expense	5,727		(11		)	5,716
Net income	9,951		101			10,052
Basic earnings per share	0.19		—			0.19
Diluted earnings per share	0.18		—			0.18
Comprehensive income	15,810		101			15,911

	Three Months Ended June 30, 2016
	As Previously Reported			Adjustments		As Restated
Revenue	$	269,220		$	2,992	$	272,212
Cost of goods sold	204,126			2,106		206,232
Gross profit	65,093			886		65,980
Selling, general and administrative expenses	51,418			203		51,622
Income from operations	1,056			683		1,739
Income before taxes	386			683		1,069
Income tax expense	2,710			264		2,974
Net loss	(2,324		)	419		(1,905		)
Basic loss per share	(0.04		)	—		(0.04		)
Diluted loss per share	(0.04		)	—		(0.04		)
Comprehensive loss	(3,714		)	419		(3,295		)

	Six Months Ended June 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	540,292		$	2,381		$	542,673
Cost of goods sold	413,253			1,914			415,167
Gross profit	127,039			467			127,506
Selling, general and administrative expenses	102,910			189			103,099
Income from operations	1,659			278			1,937
Income (loss) before taxes	(235		)	277			42
Income tax expense	4,782			302			5,084
Net loss	(5,017		)	(26		)	(5,043		)
Basic loss per share	(0.09		)	—			(0.09		)
Diluted loss per share	(0.09		)	—			(0.09		)
Comprehensive loss	(6,877		)	169			(6,708		)

	Three Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	288,386	$	137		$	288,523
Cost of goods sold	215,867		735			216,602
Gross profit	72,519		(598		)	71,921
Selling, general and administrative expenses	57,134		52			57,186
Income from operations	12,236		(649		)	11,585
Income before taxes	11,495		(650		)	10,844
Income tax expense	3,967		(239		)	3,728
Net income	7,528		(411		)	7,116
Basic earnings per share	0.14		(0.01		)	0.13
Diluted earnings per share	0.14		(0.01		)	0.13
Comprehensive income	9,696		(411		)	9,284

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments			As Restated
Revenue	$	835,306	$	(2,312	)	$	832,994
Cost of goods sold	628,282		(1,959		)	626,323
Gross profit	207,024		(353		)	206,671
Selling, general and administrative expenses	165,647		208			165,855
Income from operations	31,297		(561		)	30,736
Income before taxes	27,173		(562		)	26,612
Income tax expense	9,694		(250		)	9,444
Net income	17,479		(311		)	17,168
Basic earnings per share	0.32		—			0.32
Diluted earnings per share	0.32		(0.01		)	0.31
Comprehensive income	25,506		(311		)	25,196

	Three Months Ended September 30, 2016
	As Previously Reported		Adjustments			As Restated
Revenue	$	279,993	$	(3,991	)	$	276,002
Cost of goods sold	212,212		(2,791		)	209,421
Gross profit	67,781		(1,200		)	66,581
Selling, general and administrative expenses	52,601		(135		)	52,466
Income from operations	8,860		(1,064		)	7,796
Income before taxes	7,581		(1,064		)	6,517
Income tax expense	3,240		(948		)	2,292
Net income	4,341		(116		)	4,225
Basic earnings per share	0.08		—			0.08
Diluted earnings per share	0.08		—			0.08
Comprehensive income	4,140		(116		)	4,024

	Nine Months Ended September 30, 2016
	As Previously Reported			Adjustments			As Restated
Revenue	$	820,286		$	(1,611	)	$	818,675
Cost of goods sold	625,465			(877		)	624,588
Gross profit	194,821			(734		)	194,087
Selling, general and administrative expenses	155,511			54			155,565
Income from operations	10,520			(788		)	9,732
Income before taxes	7,347			(788		)	6,559
Income tax expense	8,023			(647		)	7,376
Net loss	(676		)	(141		)	(817		)
Basic loss per share	(0.01		)	(0.01		)	(0.02		)
Diluted loss per share	(0.01		)	(0.01		)	(0.02		)
Comprehensive loss	(2,201		)	(482		)	(2,683		)

Restated and revised consolidated balance sheet amounts (unaudited)

	As of March 31, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	187,028		(2,315	)	184,713
Unbilled revenue	35,712		(1,941	)	33,771
Inventories	30,338		6,336		36,674
Other current assets	20,598		(296	)	20,302
Total current assets	327,508		1,784		329,292
Other non-current assets	1,353		280		1,633
Total other assets	236,514		280		236,794
Total assets	598,022		2,064		600,086
Accounts payable	114,399		217		114,616
Accrued expenses	32,547		(125	)	32,422
Other current liabilities	25,231		(872	)	24,359
Deferred revenue	12,405		4,480		16,885
Total current liabilities	202,840		3,700		206,540
Deferred income taxes	9,848		(30	)	9,818
Other long-term liabilities	2,060		637		2,697
Total liabilities	328,439		4,307		332,746
Accumulated other comprehensive loss	(18,820	)	(150	)	(18,970	)
Retained earnings	115,240		(2,093	)	113,147
Total stockholders' equity	269,583		(2,243	)	267,340
Total liabilities and stockholders' equity	598,022		2,064		600,086

	As of June 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	208,382		(2,140	)	206,242
Unbilled revenue	36,515		(2,251	)	34,264
Inventories	28,192		6,366		34,558
Other current assets	20,949		(474	)	20,475
Total current assets	341,163		1,501		342,664
Other non-current assets	1,267		280		1,547
Total intangibles and other assets	237,646		280		237,926
Total assets	614,839		1,781		616,620
Accounts payable	125,593		789		126,382
Accrued expenses	27,567		(158	)	27,409
Other current liabilities	26,163		(953	)	25,210
Deferred revenue	11,585		3,807		15,392
Total current liabilities	208,750		3,485		212,235
Deferred income taxes	9,852		24		9,876
Other long-term liabilities	1,988		637		2,625
Total liabilities	339,248		4,146		343,394
Accumulated other comprehensive loss	(14,940	)	(150	)	(15,090	)
Retained earnings	119,719		(2,215	)	117,504
Total stockholders' equity	275,591		(2,365	)	273,226
Total liabilities and stockholders' equity	614,839		1,781		616,620

	As of September 30, 2017
	As Previously Reported		Adjustments		As Restated
Accounts receivable	203,306		(2,507	)	200,799
Unbilled revenue	50,130		(1,485	)	48,645
Inventories	48,744		5,430		54,174
Other current assets	31,850		(321	)	31,529
Total current assets	383,730		1,117		384,847
Other non-current assets	1,312		280		1,592
Total intangibles and other assets	238,193		280		238,473
Total assets	659,135		1,397		660,532
Accounts payable	129,600		806		130,406
Accrued expenses	32,994		(105	)	32,889
Other current liabilities	31,589		(1,173	)	30,416
Deferred revenue	11,707		4,002		15,709
Total current liabilities	205,890		3,530		209,420
Deferred income taxes	9,834		5		9,839
Other long-term liabilities	1,958		637		2,595
Total liabilities	366,866		4,172		371,038
Accumulated other comprehensive loss	(12,772	)	(150	)	(12,922	)
Retained earnings	126,994		(2,625	)	124,369
Total stockholders' equity	292,269		(2,775	)	289,494
Total liabilities and stockholders' equity	659,135		1,397		660,532

	As of March 31, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	200,629		(4,378	)	196,251
Unbilled revenue	34,548		(2,091	)	32,457
Inventories	34,715		7,635		42,350
Prepaid expenses	12,957		(433	)	12,524
Other current assets	16,708		(8	)	16,699
Total current assets	320,485		725		321,210
Total assets	598,596		725		599,321
Accounts payable	130,048		(154	)	129,894
Accrued expenses	24,257		(318	)	23,939
Deferred revenue	10,975		3,614		14,589
Total current liabilities	204,416		3,142		207,558
Deferred income taxes	10,476		(824	)	9,652
Other long-term liabilities	2,772		358		3,129
Total liabilities	345,466		2,676		348,142
Accumulated other comprehensive loss	(14,463	)	386		(14,077	)
Retained earnings	104,071		(2,337	)	101,734
Total stockholders' equity	253,130		(1,951	)	251,179
Total liabilities and stockholders' equity	598,596		725		599,321

	As of June 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	193,297		(5,050	)	188,247
Unbilled revenue	27,857		1,345		29,202
Inventories	35,901		7,627		43,528
Prepaid expenses	12,145		(433	)	11,712
Other current assets	17,647		92		17,738
Total current assets	318,453		3,580		322,033
Total assets	593,567		3,582		597,148
Accounts payable	136,260		3,654		139,914
Accrued expenses	17,818		(1,722	)	16,096
Deferred revenue	11,793		3,387		15,180
Total current liabilities	202,460		5,319		207,779
Deferred income taxes	11,620		(559	)	11,061
Other long-term liabilities	2,639		356		2,995
Total liabilities	342,984		5,116		348,100
Accumulated other comprehensive loss	(15,853	)	386		(15,467	)
Retained earnings	101,614		(1,921	)	99,693
Total stockholders' equity	250,583		(1,535	)	249,048
Total liabilities and stockholders' equity	593,567		3,581		597,148

	As of September 30, 2016
	As Previously Reported		Adjustments		As Restated
Accounts receivable	190,438		(4,779	)	185,659
Unbilled revenue	40,505		(2,523	)	37,982
Inventories	45,377		7,453		52,830
Prepaid expenses	11,984		(433	)	11,551
Other current assets	30,528		774		31,302
Total current assets	339,619		492		340,111
Total assets	612,901		492		613,393
Accounts payable	129,980		(111	)	129,869
Accrued expenses	21,037		(249	)	20,788
Deferred revenue	9,755		3,654		13,409
Total current liabilities	207,535		3,294		210,829
Deferred income taxes	11,594		(972	)	10,622
Other long-term liabilities	2,235		356		2,591
Total liabilities	355,098		2,678		357,776
Accumulated other comprehensive loss	(15,518	)	(150	)	(15,668	)
Retained earnings	105,954		(2,036	)	103,918
Total stockholders' equity	257,803		(2,186	)	255,617
Total liabilities and stockholders' equity	612,901		492		613,393

Restated and revised consolidated statement of cash flow amounts (unaudited)

	Three Months Ended March 31, 2017
	As Previously Reported		Adjustments		As Restated
Net income	5,456		222		5,678
Deferred income taxes	(16	)	494		478
Accounts receivable and unbilled revenue	(7,318	)	2,638		(4,680	)
Inventories	1,300		(1,526	)	(226	)
Prepaid expenses and other assets	(979	)	(188	)	(1,167	)
Accounts payable	(6,890	)	(1,506	)	(8,396	)
Accrued expenses and other liabilities	5,057		(134	)	4,923
Net cash provided by operating activities	120		—		120

	Three Months Ended March 31, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(2,693	)	(443	)	(3,136	)
Deferred income taxes	(389	)	(157	)	(546	)
Accounts receivable and unbilled revenue	(16,256	)	393		(15,863	)
Inventories	(1,388	)	1,841		453
Prepaid expenses and other assets	16,382		(10,414	)	5,968
Accounts payable	(40,196	)	8,670		(31,526	)
Accrued expenses and other liabilities	11,518		109		11,627
Net cash used in operating activities	(24,566	)	—		(24,566	)

	Six Months Ended June 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	9,951		101		10,052
Deferred income taxes	76		548		624
Accounts receivable and unbilled revenue	(29,395	)	2,775		(26,620	)
Inventories	3,446		(1,556	)	1,890
Prepaid expenses and other assets	(957	)	(14	)	(971	)
Accounts payable	4,304		(934	)	3,370
Accrued expenses and other liabilities	851		(920	)	(69	)
Net cash used in operating activities	(1,687	)	—		(1,687	)

	Six Months Ended June 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(5,017	)	(26	)	(5,043	)
Deferred income taxes	450		107		557
Accounts receivable and unbilled revenue	(2,366	)	(2,372	)	(4,738	)
Inventories	(2,573	)	1,848		(725	)
Prepaid expenses and other assets	16,255		(10,513	)	5,742
Accounts payable	(33,984	)	12,478		(21,506	)
Accrued expenses and other liabilities	4,632		(1,522	)	3,110
Net cash used in operating activities	(848	)	—		(848	)

	Nine Months Ended September 30, 2017
	As Previously Reported		Adjustments		As Restated
Net income	17,479		(311	)	17,168
Deferred income taxes	(82	)	530		448
Accounts receivable and unbilled revenue	(38,108	)	2,376		(35,732	)
Inventories	(17,106	)	(620	)	(17,726	)
Prepaid expenses and other assets	(10,401	)	(166	)	(10,567	)
Accounts payable	8,312		(917	)	7,395
Accrued expenses and other liabilities	11,722		(891	)	10,830
Net cash used in operating activities	(12,383	)	—		(12,383	)

	Nine Months Ended September 30, 2016
	As Previously Reported		Adjustments		As Restated
Net loss	(676	)	(141	)	(817	)
Deferred income taxes	677		(305	)	372
Accounts receivable and unbilled revenue	(12,798	)	1,225		(11,573	)
Inventories	(12,050	)	2,023		(10,027	)
Prepaid expenses and other assets	3,574		(11,196	)	(7,622	)
Accounts payable	(40,264	)	8,713		(31,551	)
Accrued expenses and other liabilities	7,861		(318	)	7,543
Net cash used in operating activities	(23,632	)	—		(23,632	)

XML

Description of the Business - Narrative (Details)	12 Months Ended
	Dec. 31, 2017 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of segments	2

XML

- Summary of Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Computer equipment
Property, Plant and Equipment [Line Items]
Useful life of property and equipment	3 years
Office Equipment
Property, Plant and Equipment [Line Items]
Useful life of property and equipment	5 years
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Useful life of property and equipment	7 years
Minimum | Software, including internal-use software
Property, Plant and Equipment [Line Items]
Useful life of property and equipment	1 year
Maximum | Software, including internal-use software
Property, Plant and Equipment [Line Items]
Useful life of property and equipment	6 years

XML

Summary of Significant Accounting Policies - Schedule of AOCI (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	$ 262,161	$ 252,432	$ 290,260
Other comprehensive income (loss), net of tax	1,720	(7,147)	(8,251)
Ending Balance	284,545	262,161	252,432
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning Balance	(20,949)	(13,802)	(5,551)
Other comprehensive income (loss), net of tax	1,720	(7,147)	(8,251)
Ending Balance	$ (19,229)	$ (20,949)	$ (13,802)

XML

Summary of Significant Accounting Policies - Narrative (Details)		3 Months Ended				12 Months Ended
	Jun. 01, 2017	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2017 USD ($) segment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)
Schedule of Significant Accounting Policies [Line Items]
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Provisional Income Tax Expense (Benefit)						$ 5,100,000.0
Realized gain (loss) on foreign currency transactions						$ (1,400,000)	$ 600,000	$ (3,300,000)
Venezuela remeasurement charges				$ 1,500,000			1,500,000
Number of segments | segment						2
Impairment charge						$ 0
Intangible asset impairment charges		$ 100,000	$ 100,000		$ 202,000	0	70,000	202,000
Interest and penalties on unrecognized tax benefits						0	0	0
Unrecognized tax benefits		0	0		$ 0	0	0	0
Advertising expense						1,200,000	1,400,000	$ 1,000,000
Additional Paid in Capital		2,100,000				2,100,000
Retained earnings		124,442,000	108,082,000	$ 101,734,000		124,442,000	$ 108,082,000		$ 124,369,000	$ 117,504,000	$ 113,147,000	$ 103,918,000	$ 99,693,000
Tax Cuts And Jobs Act Of 2017, Incomplete Accounting, Transition Tax For Accumulated Foreign Earnings, Provisional Income Tax Expense						$ 5,300,000
Minimum
Schedule of Significant Accounting Policies [Line Items]
Term on financing receivables						30 days
Vesting percentage						7.00%
Maximum
Schedule of Significant Accounting Policies [Line Items]
Term on financing receivables						90 days
Vesting percentage						8.00%
Internal Use Software
Schedule of Significant Accounting Policies [Line Items]
Finite-lived Intangible Assets Amortization Expense [Table Text Block]						5.4	9.2	8.6
Finite-lived intangible assets		$ 29,700,000	$ 26,000,000			$ 29,700,000	$ 26,000,000
Internal Use Software | Minimum
Schedule of Significant Accounting Policies [Line Items]
Useful life of intangible assets						3 years
Internal Use Software | Maximum
Schedule of Significant Accounting Policies [Line Items]
Useful life of intangible assets						6 years
Customer lists
Schedule of Significant Accounting Policies [Line Items]
Useful life of intangible assets						14 years
Non-competition agreements
Schedule of Significant Accounting Policies [Line Items]
Useful life of intangible assets						4 years
Trade names
Schedule of Significant Accounting Policies [Line Items]
Useful life of intangible assets						13 years
Patents
Schedule of Significant Accounting Policies [Line Items]
Useful life of intangible assets						9 years
Office equipment and furniture
Schedule of Significant Accounting Policies [Line Items]
Useful life of property and equipment						7 years
Venezuelan bolívar fuerte
Schedule of Significant Accounting Policies [Line Items]
Rate on currency remeasurement		6.3				6.3
Exchange rate		198				198
Performance Shares | Minimum
Schedule of Significant Accounting Policies [Line Items]
Vesting percentage	0.00%
Performance Shares | Maximum
Schedule of Significant Accounting Policies [Line Items]
Vesting percentage	200.00%
Accounting Standards Update 2016-09 [Member]
Schedule of Significant Accounting Policies [Line Items]
Deferred Income Tax Liabilities, Net		$ 2,300,000				$ 2,300,000
Retained earnings		$ 200,000				200,000
Common Stock | Series of Business Acquisitions
Schedule of Significant Accounting Policies [Line Items]
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Value of Shares Repurchased						$ 91,000	$ 0	$ 0

XML

Acquisitions - Schedule of Potential Contingent Consideration (Details)	12 Months Ended
	Dec. 31, 2017
Business Acquisition, Contingent Consideration [Line Items]
Estimated probability for contingent consideration payout	100.00%

XML

Acquisitions - Schedule of Equity Issued for Acquisition (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Shares issued as payments for acquisitions	$ 4,678	$ 2,012	$ 1,571
Series of Business Acquisitions | Common Stock
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Payments of contingent consideration (in shares)	441	244	238
Shares issued as payment of contingent consideration	$ 4,678	$ 2,012	$ 1,570
Payments of contingent consideration (in USD per share)	$ 10.61	$ 8.25	$ 6.59

XML

Acquisitions - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Contingent consideration	$ (17,700)								$ (17,700)
Decrease in contingent consideration liability	$ 167	$ (1,884)	$ 1,040	$ (788)	$ (7,276)	$ (1,911)	$ (844)	$ (9,187)	$ (677)	$ (9,975)	$ (677)	$ (10,417)	$ 270

XML

Goodwill - Schedule of Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Goodwill [Roll Forward]
Balance	$ 202,700	$ 206,257
Goodwill impairment charge	0
Foreign exchange impact	(2,754)	(3,557)
Balance	199,946	202,700
North America
Goodwill [Roll Forward]
Balance	170,757	170,736
Foreign exchange impact	(72)	21
Balance	170,685	170,757
International
Goodwill [Roll Forward]
Balance	31,943	35,521
Foreign exchange impact	(2,682)	(3,578)
Balance	$ 29,262	$ 31,943

XML

Goodwill - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment charge		$ 0
Foreign exchange impact		(2,754)	$ (3,557)
Goodwill impairment	$ 37,500	$ 0	$ 0	$ 37,539

XML

Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Acquired Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 78,146				$ 76,177
Less accumulated amortization	(50,583)				(44,639)
Intangible assets, net	27,563	$ 28,745	$ 29,699	$ 30,452	31,538	$ 33,476	$ 34,831	$ 36,577
Customer lists
Acquired Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 74,615				72,667
Weighted Average Life	13 years 7 months
Non-competition agreements
Acquired Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 964				943
Weighted Average Life	4 years 1 month
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 2,510				2,510
Weighted Average Life	13 years 4 months
Patents
Acquired Finite-Lived Intangible Assets [Line Items]
Gross intangible assets	$ 57				$ 57
Weighted Average Life	9 years

XML

Other Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
2018	$ 4,571
2019	4,338
2020	4,168
2021	3,862
2022	3,366
Thereafter	7,258
Intangible assets, net	$ 27,563	$ 28,745	$ 29,699	$ 30,452	$ 31,538	$ 33,476	$ 34,831	$ 36,577

XML

Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets				$ 5,000	$ 5,500	$ 5,800
Intangible asset impairment charges	$ 100	$ 100	$ 202	$ 0	$ 70	$ 202

XML

Restructuring Activities and Other Charges - Schedule of Restructuring Charges (Details) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Restructuring Reserve [Roll Forward]
Balance at December 31			$ 1,566			$ 359	$ 1,566	$ 359	$ 1,566	$ 359	$ 1,566	$ 359
Expenses	$ 0	$ 0	0	$ 465	$ 623	3,344	0	3,967	0	4,433	0	5,615	$ 1,053
Cash payments											(1,082)	(4,408)
Balance at December 31											484	1,566	359
Employee Severance and Related Benefits
Restructuring Reserve [Roll Forward]
Balance at December 31			1,349			284	1,349	284	1,349	284	1,349	284
Expenses											0	4,552
Cash payments											(866)	(3,487)
Balance at December 31											484	1,349	284
Lease and Contract Termination Costs
Restructuring Reserve [Roll Forward]
Balance at December 31			17			75	17	75	17	75	17	75
Expenses											0	863
Cash payments											(17)	(921)
Balance at December 31											0	17	75
Other Restructuring [Member]
Restructuring Reserve [Roll Forward]
Balance at December 31			$ 200			$ 0	$ 200	$ 0	$ 200	$ 0	200	0
Expenses											0	200
Cash payments											(200)	0
Balance at December 31											$ 0	$ 200	$ 0

XML

Restructuring Activities and Other Charges - Narrative (Details) $ in Thousands	3 Months Ended						6 Months Ended		9 Months Ended		12 Months Ended			13 Months Ended
	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) employee	Dec. 14, 2015 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve											$ 484	$ 1,566	$ 359	$ 1,566
Expected number of positions to eliminate (in employee) | employee														100
Expected restructuring cost															$ 6,700
Restructuring charges	$ 0	$ 0	$ 0	$ (465)	$ (623)	$ (3,344)	$ 0	$ (3,967)	$ 0	$ (4,433)	0	(5,615)	(1,053)
Cash payments											(1,082)	(4,408)
Employee Severance and Related Benefits
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve											484	1,349	284	$ 1,349
Expected restructuring cost															5,600
Restructuring charges											0	(4,552)
Cash payments											(866)	(3,487)
Lease and Contract Termination Costs
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve											0	17	75	17
Restructuring charges											0	(863)
Cash payments											(17)	(921)
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve											0	200	0	$ 200
Restructuring charges											0	(200)
Cash payments											$ (200)	0
Maximum | Lease and Contract Termination Costs
Restructuring Cost and Reserve [Line Items]
Expected restructuring cost															$ 1,100
North America
Restructuring Cost and Reserve [Line Items]
Restructuring charges												(500)	(200)
International
Restructuring Cost and Reserve [Line Items]
Restructuring charges												(3,900)	$ (900)
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring charges												$ (1,200)

XML

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 99,082				$ 86,661
Less accumulated depreciation	(62,368)				(54,005)
Property and equipment, net	36,714	$ 37,212	$ 36,030	$ 34,000	32,656	$ 32,279	$ 33,089	$ 33,208
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	10,985				9,568
Software, including internal-use software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	78,410				68,980
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Property and equipment, gross	6,111				5,073
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,576				$ 3,040

XML

Property and Equipment - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Basic earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.11	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.19	$ (0.09)	$ 0.32	$ (0.02)	$ 0.31	$ 0.07	$ (0.61)
Diluted earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.18	$ (0.09)	$ 0.31	$ (0.02)	$ 0.30	$ 0.07	$ (0.61)
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Depreciation													8,400	12,400	$ 11,700
Property, Plant and Equipment, Disposals	400
Property, Plant and Equipment, Net	36,714	$ 37,212	$ 36,030	$ 34,000	$ 32,656	$ 32,279	$ 33,089	$ 33,208	$ 36,030	$ 33,089	$ 37,212	$ 32,279	$ 36,714	$ 32,656
Internal Use Software [Member]
Property, Plant and Equipment [Line Items]
Basic earnings (loss) per share (in USD per share)													$ 0.015
Diluted earnings (loss) per share (in USD per share)													$ 0.015
Property, Plant and Equipment, Net	$ 20,800												$ 20,800
Change in Accounting Method Accounted for as Change in Estimate [Member] | Internal Use Software [Member]
Property, Plant and Equipment [Line Items]
Net income (loss)													800
Depreciation													$ 1,400
Useful life of property and equipment													4 years 6 months

XML

Revolving Credit Facility - Narrative (Details)			12 Months Ended
	Feb. 22, 2016	Aug. 02, 2010 USD ($)	Dec. 31, 2017 USD ($)
Line of Credit Facility [Line Items]
Line of Credit Facility, Expiration Date			Sep. 25, 2019
Ratio of Indebtedness to Net Capital			3.0
Debt Instrument, Convertible, Conversion Ratio			5.0
Revolving Credit Facility | August 2010 Credit Facility Agreement
Line of Credit Facility [Line Items]
Maximum borrowing capacity on line of credit		$ 175,000,000
Increase to borrowing capacity		$ 50,000,000
Unused capacity			$ 32,400,000
Borrowings to be drawn			$ 800,000
Maximum leverage ratio		3.0
Minimum interest coverage ratio		5
Base Rate
Line of Credit Facility [Line Items]
Additional basis on borrowings	110.00%
Minimum
Line of Credit Facility [Line Items]
Additional basis on borrowings			125.00%
Minimum | Eurodollar
Line of Credit Facility [Line Items]
Additional basis on borrowings			25.00%
Minimum | Eurodollar | Revolving Credit Facility | August 2010 Credit Facility Agreement
Line of Credit Facility [Line Items]
Additional basis on borrowings		1.25%
Minimum | Base Rate | Revolving Credit Facility | August 2010 Credit Facility Agreement
Line of Credit Facility [Line Items]
Additional basis on borrowings		0.25%
Maximum
Line of Credit Facility [Line Items]
Additional basis on borrowings			250.00%
Maximum | Eurodollar
Line of Credit Facility [Line Items]
Additional basis on borrowings			150.00%
Maximum | Eurodollar | Revolving Credit Facility | August 2010 Credit Facility Agreement
Line of Credit Facility [Line Items]
Additional basis on borrowings		2.50%
Maximum | Base Rate | Revolving Credit Facility | August 2010 Credit Facility Agreement
Line of Credit Facility [Line Items]
Additional basis on borrowings		1.50%
International [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity on line of credit			$ 5,000,000.0
Unused capacity			$ 4,700,000

XML

Commitments and Contingencies - Schedule of Future Lease Payments (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 6,942
2019	5,298
2020	4,334
2021	2,861
2022	1,699
Thereafter	2,080
Total minimum lease payments	$ 23,214

XML

Commitments and Contingencies - Narrative (Details) € in Millions, $ in Millions	1 Months Ended						12 Months Ended
	Jan. 31, 2014 USD ($)	Jan. 31, 2014 EUR (€)	Dec. 31, 2013 USD ($)	Dec. 31, 2013 EUR (€)	Nov. 30, 2013 USD ($)	Nov. 30, 2013 EUR (€)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2015 EUR (€)	Feb. 28, 2014 USD ($)	Feb. 28, 2014 EUR (€)
Commitments and Contingencies Disclosure [Abstract]
Rent expense							$ 9.9	$ 10.6	$ 11.4
Wrongful Termination Lawsuit - Productions Graphics
Loss Contingencies [Line Items]
Damages sought			$ 1.0	€ 0.7	$ 1.0	€ 0.7
Contingent consideration											$ 9.4	€ 7.1
Fixed consideration									8.0	€ 5.8
Maximum consideration									$ 37.6	€ 34.5
Employment Arbitration Claim
Loss Contingencies [Line Items]
Damages sought	$ 0.7	€ 0.6

XML

Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income Tax Holiday, Aggregate Dollar Amount											$ 400
Current
Federal											3,076	$ 477	$ 0
State											62	159	324
Foreign											4,078	5,972	5,295
Total current income tax expense											7,216	6,608	5,619
Deferred
Federal											1,959	4,165	2,619
State											1,575	414	166
Foreign											538	(353)	3,094
Total deferred income tax expense			$ 478			$ (546)	$ 624	$ 557	$ 448	$ 372	4,072	4,226	5,879
Prior year provision to return adjustment	$ 3,728	$ 3,362	$ 2,354	$ 2,292	$ 2,974	$ 2,110	$ 5,716	$ 5,084	$ 9,444	$ 7,376	$ 11,288	$ 10,834	$ 11,498

XML

Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Tax expense (benefit) at U.S. federal income tax rate											$ 9,706	$ 5,175	$ (7,312)
State income taxes, net of federal income tax effect											883	447	497
Federal and state deferred tax rate change											(5,119)	0	0
Transition tax											5,323	0	0
Effect of non-US operations											(2,228)	(781)	89
Nontaxable contingent liability fair value changes and goodwill impairment											237	3,578	13,083
Research and development credit											(38)	(140)	(422)
Change in valuation allowances											2,103	2,206	5,173
Prior year provision to return adjustment											(581)	(137)	(948)
Write-off of deferred taxes and tax receivables											70	193	858
Change in valuation allowances											932	293	480
Prior year provision to return adjustment	$ 3,728	$ 3,362	$ 2,354	$ 2,292	$ 2,974	$ 2,110	$ 5,716	$ 5,084	$ 9,444	$ 7,376	$ 11,288	$ 10,834	$ 11,498

XML

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Inventory reserve	$ 700	$ 902
Other reserves and allowances	370	4,455
Income tax basis in excess of financial statement basis in intangible assets	1,669	3,394
Deductible stock-based compensation	3,687	4,579
Net operating loss carryforward	13,669	10,070
Tax credit carryforwards	428	2,600
Total deferred tax assets, gross	20,523	26,000
Total deferred tax assets	(10,711)	(8,292)
Total deferred tax assets	9,812	17,708
Deferred tax liabilities:
Prepaid & other expenses	(265)	(138)
Fixed assets	(4,946)	(5,913)
Intangible assets	(15,953)	(21,392)
Total deferred tax liabilities	(21,164)	(27,443)
Net deferred tax liability (as restated)	$ (11,352)	$ (9,735)

XML

Income Taxes - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Federal tax rate	35.00%	21.00%	35.00%
Increase in valuation allowance	$ 2,400,000	$ 1,800,000
Income Tax Disclosure [Line Items]
Limitation on operating loss carryforward	200,000
Undistributed earnings for foreign operations	59,000,000	34,500,000
Income (loss) from foreign operations	14.4	$ 13.1	$ 0
Credit to income tax provision	(5,100,000.0)
Transition tax	5,300,000
Domestic Tax Authority
Income Tax Disclosure [Line Items]
Net operating loss carryforward from acquisitions	600,000
Tax credit carryforward	300,000
State and Local Jurisdiction
Income Tax Disclosure [Line Items]
Operating loss carryforwards	500,000
IRS | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	900,000
France tax authority | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	8,900,000
Italy tax authority | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	400,000
Chile tax authority | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	1,300,000
Germany Tax Authority [Member] [Domain] | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	800,000
South Africa Tax Authority [Member] [Domain] | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	200,000
National Tax Agency, Japan [Member] | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	300,000
Brazil tax authority | Domestic Tax Authority
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 300,000

XML

Income Taxes Uncertain Tax Positions (Details)	12 Months Ended
	Dec. 31, 2017 USD ($)
Income Tax Disclosure [Abstract]
Balance at December 31, 2016	$ 517
Additions based on tax positions related to the current year	0
Subtractions based on tax positions related to the current year	(35)
Interest and penalties	17
Balance at December 31, 2017	$ 499

XML

Fair Value Measurement - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Liabilities:
Contingent consideration		$ 19,283
Quoted Prices in Active Markets for Identical Assets (Level 1)
Liabilities:
Contingent consideration		0
Significant Other Observable Inputs (Level 2)
Liabilities:
Contingent consideration		0
Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent consideration	$ 0	$ 19,283	$ 22,162

XML

Fair Value Measurement - Rollforward of Unobservable Reconciliations (Details) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31			$ 19,283				$ 19,283		$ 19,283		$ 19,283
Change in fair value of contingent consideration	$ (167)	$ 1,884	(1,040)	$ 788	$ 7,276	$ 1,911	844	$ 9,187	677	$ 9,975	677	$ 10,417	$ (270)
Foreign exchange impact											(2,754)	(3,557)
Balance at December 31												19,283
Significant Unobservable Inputs (Level 3)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31			$ 19,283			$ 22,162	$ 19,283	$ 22,162	$ 19,283	$ 22,162	19,283	22,162
Contingent consideration payments paid in stock											15,345	11,374
Change in fair value(1)											(4,678)	(2,012)
Change in fair value of contingent consideration												402
Foreign exchange impact											63	(312)
Balance at December 31											$ 0	$ 19,283	$ 22,162

XML

Fair Value Measurement - Narrative (Details)	12 Months Ended
	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Estimated probability for contingent consideration payout	100.00%

XML

Earnings Per Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Denominator:
Denominator for basic earnings per share—weighted-average shares outstanding (in shares)													53,851	53,607	52,791
Effect of dilutive securities:
Employee stock options and restricted common shares (in shares)													1,093	728	0
Contingently issuable shares (in shares)													0	125	0
Denominator for dilutive earnings per share (in shares)													54,944	54,460	52,791
Basic earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.11	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.19	$ (0.09)	$ 0.32	$ (0.02)	$ 0.31	$ 0.07	$ (0.61)
Diluted earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.18	$ (0.09)	$ 0.31	$ (0.02)	$ 0.30	$ 0.07	$ (0.61)

XML

Earnings Per Share - Narrative (Details) - shares shares in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share [Abstract]
Shares excluded from EPS (in shares)	1.1	3.8	3.2

XML

Share Repurchase Program - Narrative (Details) - USD ($)		12 Months Ended
	Feb. 12, 2015	Dec. 31, 2017	Dec. 31, 2015	May 04, 2017
Equity [Abstract]
Authorized share repurchase	$ 20,000,000			$ 30,000,000
Term of share repurchase program	2 years
Acquisition of treasury shares (in shares)		1,121,928
Value of shares repurchased		$ 10,976,000	$ 4,897,000
Cost per share acquired (in USD per share)		$ 9.78

XML

Stock-Based Compensation Plans - Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding at December 31 (in shares)	4,761	4,060	4,046
Granted (in shares)	568	1,348	975
Exercised (in shares)	(428)	(420)	(405)
Forfeitures (in shares)	(467)	(227)	(556)
Outstanding at December 31 (in shares)	4,434	4,761	4,060
Options vested (in shares)	2,505	2,500	2,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Outstanding at December 31 (in USD per share)	$ 8.40	$ 8.37	$ 8.35
Granted (in USD per share)	10.73	8.15	6.87
Exercised (in USD per share)	7.85	6.27	2.95
Forfeited (in USD per share)	10.39	10.20	9.58
Outstanding at December 31 (in USD per share)	8.57	$ 8.40	$ 8.37
Options vested (in USD per share)	$ 8.62
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding at December 31	$ 8,655	$ 2,760	$ 4,725
Granted	0	0	0
Exercised	1,300	4,455	1,604
Forfeited	539	0	0
Outstanding at December 31	9,340	$ 8,655	$ 2,760
Options vested	$ 5,860

XML

Stock-Based Compensation Plans - Weighted Average Fair Value of Options Granted (Details) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	568	1,348	975
Grant date fair value (USD per share)	$ 4.42	$ 3.38	$ 3.39
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	10.73	8.15	6.87
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price (USD per share)	11.47	9.20	8.20
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price (USD per share)	$ 8.46	$ 6.99	$ 6.21

XML

Stock-Based Compensation Plans - Option Assumptions (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	0.00%	0.00%	0.00%
Expected life	6 years 6 months	6 years 6 months	6 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.34%	2.03%	2.12%
Volatility	38.00%	50.00%	50.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.98%	1.53%	1.92%
Volatility	36.00%	38.00%	50.00%

XML

Stock-Based Compensation Plans - Schedule of Exercise Price Ranges (Details) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	4,434	4,761	4,060	4,046
Options Outstanding - Weighted-Average Life	5 years 8 months 12 days
Outstanding outstanding (in USD per share)	$ 8.57	$ 8.40	$ 8.37	$ 8.35
Options vested (in shares)	2,505	2,500	2,500
Options vested (in USD per share)	$ 8.62
$0.00 - $4.36
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	64
Options Outstanding - Weighted-Average Life	1 year 3 months 14 days
Outstanding outstanding (in USD per share)	$ 3.11
Options vested (in shares)	64
Options vested (in USD per share)	$ 3.11
Exercise price, minimum (USD per share)	0.00
Exercise price, maximum (USD per share)	$ 4.36
$4.37 - $7.95
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	2,189
Options Outstanding - Weighted-Average Life	5 years 2 months 23 days
Outstanding outstanding (in USD per share)	$ 6.68
Options vested (in shares)	1,320
Options vested (in USD per share)	$ 6.43
Exercise price, minimum (USD per share)	4.37
Exercise price, maximum (USD per share)	$ 7.95
$7.96 - $11.97
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	1,613
Options Outstanding - Weighted-Average Life	7 years 6 months
Outstanding outstanding (in USD per share)	$ 9.55
Options vested (in shares)	552
Options vested (in USD per share)	$ 9.32
Exercise price, minimum (USD per share)	7.96
Exercise price, maximum (USD per share)	$ 11.97
$11.98 - $15.05
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	568
Options Outstanding - Weighted-Average Life	2 years 11 months 8 days
Outstanding outstanding (in USD per share)	$ 13.65
Options vested (in shares)	568
Options vested (in USD per share)	$ 13.65
Exercise price, minimum (USD per share)	11.98
Exercise price, maximum (USD per share)	$ 15.05

XML

Stock-Based Compensation Plans - Restricted Stock Awards and Performance-Based Restricted Stock Units (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested shares at December 31 (in shares)	1,009,000	957,000	1,090,000
Granted (in shares)	332,000	559,000	688,000
Vested and transferred to unrestricted common stock (in shares)	(403,000)	(429,000)	(465,000)
Forfeited (in shares)	(166,000)	(78,000)	(356,000)
Nonvested shares at December 31 (in shares)	772,000	1,009,000	957,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Nonvested shares at December 31 (USD per share)	$ 7.92	$ 7.66	$ 8.92
Granted (USD per share)	11.00	8.24	6.90
Vested and transferred to unrestricted common stock (USD per share)	8.28	7.71	8.40
Forfeited (USD per share)	8.51	8.04	8.19
Nonvested shares at December 31 (USD per share)	$ 8.98	$ 7.92	$ 7.66
Phantom Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested shares at December 31 (in shares)	0
Granted (in shares)	151,822
Forfeited (in shares)	(23,588)
Nonvested shares at December 31 (in shares)	128,234	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Nonvested shares at December 31 (USD per share)	$ 0.00
Granted (USD per share)	11.10
Forfeited (USD per share)	11.10
Nonvested shares at December 31 (USD per share)	$ 11.10	$ 0.00
Minimum | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	1 year

XML

Stock-Based Compensation Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2014	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2006
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense		$ 1,419	$ 1,241	$ 2,921	$ 2,358	$ 5,296	$ 4,097	$ 6,820	$ 5,572	$ 5,873
Additional stock-based compensation									$ 900	$ 1,000
Term of award								6 years 6 months	6 years 6 months	6 years
Options Outstanding - Weighted-Average Life								5 years 8 months 12 days
Options vested (in shares)								2,505,000	2,500,000	2,500,000
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage								7.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage								8.00%
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense								$ 2,900	$ 2,300	$ 2,400
Term of award								10 years
Weighted average remaining contractual life, vested								5 years 8 months 12 days
Weighted average remaining contractual life, exercisable								3 years 8 months 4 days
Share price (USD per share)								$ 10.03	$ 9.98	$ 7.50
Unrecognized stock-based compensation on options								$ 5,000	$ 7,400	$ 5,600
Period for recognition of compensation expense								2 years 5 months	3 years 7 months	2 years 9 months
Stock Option | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period								4 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense								$ 3,500	$ 3,300	$ 3,500
Unrecognized stock-based compensation on options								$ 5,100	$ 7,600	$ 6,900
Period for recognition of compensation expense								2 years 6 months	2 years 7 months	2 years 8 months
Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period								1 year
Restricted Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period								5 years
Phantom Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period for recognition of compensation expense								2 years
Share-based compensation expense								$ 400
Unrecognized stock-based compensation								$ 1,400
Phantom Share Units (PSUs) [Member] | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target vesting percentage								0.00%
Number of common shares issuable (in shares)								0
Phantom Share Units (PSUs) [Member] | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target vesting percentage								200.00%
Number of common shares issuable (in shares)								256,465
2006 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized (in shares)	2,900,000
Additional shares authorized (in shares)				10,750,000							7,850,000

XML

Benefit Plans (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Retirement Benefits [Abstract]
Required period of service	30 days
Contribution to 401(k)	$ 1.0	$ 1.0	$ 1.0

XML

Related Party Transactions - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Arthur J.Gallagher & Co
Related Party Transaction [Line Items]
Print services	$ 1.9	$ 1.9	$ 1.7
Insurance and risk management services	0.1	0.2	$ 0.6
Related party receivable	0.2	$ 0.4
Enova Inc. [Member]
Related Party Transaction [Line Items]
Print services	0.1
Related party receivable	$ 0.1

XML

Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Noncash or Part Noncash Acquisitions [Line Items]
Interest	$ 4,072	$ 4,338	$ 4,306
Income taxes	9,838	5,485	3,863
Total interest and income taxes paid	13,910	9,823	8,169
Series of Business Acquisitions | Common Stock
Noncash or Part Noncash Acquisitions [Line Items]
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Value of Shares Repurchased	91	0	0
Shares issued as payment of contingent consideration	4,678	2,012	1,570
Total shares issued for acquisition and contingent consideration	$ 4,769	$ 2,012	$ 1,570

XML

Business Segments - Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenue from third parties													$ 1,138,361	$ 1,094,402	$ 1,028,892
Revenue from other segments													0	0	0
Total revenue	$ 305,367	$ 288,523	$ 280,066	$ 264,405	$ 275,727	$ 276,002	$ 272,212	$ 270,461	$ 544,471	$ 542,673	$ 832,994	$ 818,675	1,138,361	1,094,402	1,028,892
Adjusted EBITDA													57,883	58,612	50,679
Total assets	$ 649,638	$ 660,532	$ 616,620	$ 600,086	$ 593,987	$ 613,393	$ 597,148	$ 599,321	$ 616,620	$ 597,148	$ 660,532	$ 613,393	649,638	593,987
North America
Segment Reporting Information [Line Items]
Revenue from third parties													780,511	736,140	708,071
Revenue from other segments													5,469	6,029	7
Total revenue													785,980	742,169	708,078
Adjusted EBITDA													74,230	68,434	63,436
International
Segment Reporting Information [Line Items]
Revenue from third parties													357,850	358,262	320,821
Revenue from other segments													15,137	17,526	8,691
Total revenue													372,987	375,788	329,512
Adjusted EBITDA													19,520	21,570	15,124
Other (2)
Segment Reporting Information [Line Items]
Revenue from third parties													0	0	0
Revenue from other segments													(20,606)	(23,555)	(8,698)
Total revenue													(20,606)	(23,555)	(8,698)
Adjusted EBITDA													$ (35,867)	$ (31,392)	$ (27,881)

XML

Business Segments - EBITDA and Adjusted EBITDA (Details) - USD ($) $ in Thousands	3 Months Ended									6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting [Abstract]
Adjusted EBITDA														$ 57,883	$ 58,612	$ 50,679
Depreciation and amortization		$ (3,317)	$ (3,182)	$ (2,904)		$ (5,066)	$ (4,720)	$ (4,596)		$ (6,086)	$ (9,316)	$ (9,403)	$ (14,382)	(13,390)	(17,916)	(17,472)
Stock-based compensation				(1,419)				(1,241)		(2,921)	(2,358)	(5,296)	(4,097)	(6,820)	(5,572)	(5,873)
Change in fair value of contingent consideration liability		(167)	1,884	(1,040)		788	7,276	1,911		844	9,187	677	9,975	677	10,417	(270)
Goodwill impairment charge									$ (37,500)					0	0	(37,539)
Intangible asset impairment charges	$ (100)				$ (100)				$ (202)					0	(70)	(202)
Restructuring and other charges														0
Restructuring charges		0	0	0		465	623	3,344		0	3,967	0	4,433	0	5,615	1,053
Business Development														(715)	0	0
Secured asset reserve														0	0	(2,023)
Professional fees related to ASC 606 implementation														(829)	0	0
Executive Succession Search Costs														454	0	0
Czech Koruna Appreciation Impact on Gross Profit														860	0	0
CEO search costs		741	2,190	1,193		1,279	670	1,224		3,383	1,894	4,124	3,173	6,420	4,239	7,678
Income (loss) before income taxes		10,844	7,736	8,032		6,517	1,069	(1,026)		15,768	42	26,612	6,559	27,718	14,783	(20,891)
Interest income		31	12	34		26	24	14		46	38	77	63	97	86	69
Interest expense		$ 1,198	$ 1,038	$ 1,003		$ 1,190	$ 985	$ 1,077		$ 2,041	$ 2,062	$ 3,239	$ 3,252	$ 4,729	$ 4,171	$ 4,612

XML

Business Segments - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) segment	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)
Segment Reporting [Abstract]
Number of segments | segment	2
Segment Reporting Information [Line Items]
Property and equipment, net	$ 36,714	$ 37,212	$ 36,030	$ 34,000	$ 32,656	$ 32,279	$ 33,089	$ 33,208
United States
Segment Reporting Information [Line Items]
Property and equipment, net	21,800				21,200
International
Segment Reporting Information [Line Items]
Property and equipment, net	$ 14,900				$ 11,400

XML

Business Segments - Assets by Geographic Area (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	$ 36,714	$ 37,212	$ 36,030	$ 34,000	$ 32,656	$ 32,279	$ 33,089	$ 33,208
Total assets	649,638	$ 660,532	$ 616,620	$ 600,086	593,987	$ 613,393	$ 597,148	$ 599,321
United States
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	21,800				21,200
North America
Segment Reporting Information [Line Items]
Total assets	401,415				370,403
International
Segment Reporting Information [Line Items]
Property, Plant and Equipment, Net	14,900				11,400
Total assets	228,321				203,238
Other Geographical Region
Segment Reporting Information [Line Items]
Total assets	$ 19,902				$ 20,346

XML

Restatement and Revision of Prior Period Financial Statements - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Goods Sold		$ 216,602	$ 210,020	$ 199,701		$ 209,421	$ 206,232	$ 208,935	$ 409,721	$ 415,167	$ 626,323	$ 624,588	$ 862,903	$ 831,838	$ 788,862
Inventories	$ 40,694	54,174	34,558	36,674	$ 36,448	52,830	43,528	42,350	34,558	43,528	54,174	52,830	40,694	36,448
Revenue	305,367	288,523	280,066	264,405	275,727	276,002	272,212	270,461	544,471	542,673	832,994	818,675	1,138,361	1,094,402	1,028,892
Unbilled revenue	50,016	48,645	34,264	33,771	31,516	37,982	29,202	32,457	34,264	29,202	48,645	37,982	50,016	31,516
Deferred revenue	17,620	15,709	15,392	16,885	16,402	13,409	15,180	14,589	15,392	15,180	15,709	13,409	17,620	16,402
Impact of Restatement on Opening Retained Earnings, Net of Tax															2,600
Impact of Restatement on Opening Accumulated Other Comprehensive Income (Loss), Net of Tax															200
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Goods Sold		735	717	(3,412)		(2,791)	2,106	(192)	(2,695)	1,914	(1,959)	(877)	4,982	4,682	(297)
Inventories	5,887	5,430	6,366	6,336	4,810	7,453	7,627	7,635	6,366	7,627	5,430	7,453	5,887	4,810
Revenue	4,417	137	536	(2,985)	5,309	(3,991)	2,992	(612)	(2,449)	2,381	(2,312)	(1,611)	2,105	3,698	$ (461)
Unbilled revenue	627	(1,485)	(2,251)	(1,941)	(1,207)	(2,523)	1,345	(2,091)	(2,251)	1,345	(1,485)	(2,523)	627	(1,207)
Deferred revenue	3,935	$ 4,002	$ 3,807	$ 4,480	4,324	$ 3,654	$ 3,387	$ 3,614	$ 3,807	$ 3,387	$ 4,002	$ 3,654	3,935	4,324
Accrued Accounts Payable | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Goods Sold													2,200
Accounts Payable	3,000				800								3,000	800
FOB Destination Contracts | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cost of Goods Sold													2,800	2,100
Inventories	2,300				3,300								2,300	3,300
Accounts Payable	1,800												1,800
Revenue													3,400	2,700
Unbilled revenue					1,800									1,800
Customer-owned inventory | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Inventories	3,300				3,600								3,300	3,600
Deferred revenue	4,100				4,300								4,100	4,300
Unbilled Revenue | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts Payable	$ 1,300				$ 900								1,300	$ 900
Revenue													$ 1,000

XML

Restatement and Revision of Prior Period Financial Statements - Condensed Consolidated Statements of Income (Details) - USD ($)	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable, net of allowance for doubtful accounts of $3,534 and $2,622, respectively	$ 200,799,000	$ 206,242,000	$ 184,713,000	$ 182,464,000	$ 185,659,000	$ 188,247,000	$ 196,251,000		$ 182,464,000		$ 182,464,000		$ 182,464,000
Revenue	305,367,000	288,523,000	280,066,000	264,405,000	275,727,000	276,002,000	272,212,000	$ 270,461,000	544,471,000	$ 542,673,000	832,994,000	$ 818,675,000	1,138,361,000	$ 1,094,402,000	$ 1,028,892,000
Cost of Goods Sold		216,602,000	210,020,000	199,701,000		209,421,000	206,232,000	208,935,000	409,721,000	415,167,000	626,323,000	624,588,000	862,903,000	831,838,000	788,862,000
Gross profit	68,787,000	71,921,000	70,046,000	64,704,000	68,477,000	66,581,000	65,980,000	61,526,000	134,750,000	127,506,000	206,671,000	194,087,000	275,458,000	262,564,000	240,030,000
Selling, general and administrative		57,186,000	55,054,000	53,615,000		52,466,000	51,622,000	51,477,000	108,669,000	103,099,000	165,855,000	155,565,000	227,253,000	209,524,000	197,247,000
Income (loss) from operations		11,585,000	9,926,000	9,225,000		7,796,000	1,739,000	198,000	19,151,000	1,937,000	30,736,000	9,732,000	34,138,000	19,022,000	(13,213,000)
Income (loss) before taxes		10,844,000	7,736,000	8,032,000		6,517,000	1,069,000	(1,026,000)	15,768,000	42,000	26,612,000	6,559,000	27,718,000	14,783,000	(20,891,000)
Income tax expense (benefit)		3,728,000	3,362,000	2,354,000		2,292,000	2,974,000	2,110,000	5,716,000	5,084,000	9,444,000	7,376,000	11,288,000	10,834,000	11,498,000
Net income (loss)	$ (738,000)	$ 7,116,000	$ 4,374,000	$ 5,678,000	$ 4,765,000	$ 4,225,000	$ (1,905,000)	$ (3,136,000)	$ 10,052,000	$ (5,043,000)	$ 17,168,000	$ (817,000)	$ 16,430,000	$ 3,949,000	$ (32,389,000)
Basic earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.11	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.19	$ (0.09)	$ 0.32	$ (0.02)	$ 0.31	$ 0.07	$ (0.61)
Diluted earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.18	$ (0.09)	$ 0.31	$ (0.02)	$ 0.30	$ 0.07	$ (0.61)
Comprehensive income (loss)		$ 9,284,000	$ 8,253,000	$ 7,657,000		$ 4,024,000	$ (3,295,000)	$ (3,411,000)	$ 15,911,000	$ (6,708,000)	$ 25,196,000	$ (2,683,000)	$ 18,150,000	$ (3,198,000)	$ (40,640,000)
Deferred income taxes				478,000				(546,000)	624,000	557,000	448,000	372,000	4,072,000	4,226,000	5,879,000
Increase decrease in accounts receivable and unbilled receivables				(4,680,000)				(15,863,000)	(26,620,000)	(4,738,000)	(35,732,000)	(11,573,000)	(41,877,000)	(2,651,000)	(10,580,000)
Increase (Decrease) in Inventories				(226,000)				453,000	1,890,000	(725,000)	(17,726,000)	(10,027,000)	(4,245,000)	6,355,000	(9,676,000)
Increase (Decrease) in Prepaid Expense and Other Assets				(1,167,000)				5,968,000	(971,000)	5,742,000	(10,567,000)	(7,622,000)	(13,547,000)	(8,206,000)	(4,140,000)
Accounts payable				(8,396,000)				(31,526,000)	3,370,000	(21,506,000)	7,395,000	(31,551,000)	18,152,000	(38,408,000)	25,102,000
Accrued expenses and other liabilities				4,923,000				11,627,000	(69,000)	3,110,000	10,830,000	7,543,000	15,520,000	12,933,000	3,582,000
Net cash provided by operating activities				120,000				(24,566,000)	(1,687,000)	(848,000)	(12,383,000)	(23,632,000)	16,056,000	10,525,000	43,402,000
Unbilled revenue	$ 50,016,000	48,645,000	34,264,000	33,771,000	$ 31,516,000	37,982,000	29,202,000	32,457,000	34,264,000	29,202,000	48,645,000	37,982,000	50,016,000	31,516,000
Inventories	40,694,000	54,174,000	34,558,000	36,674,000	36,448,000	52,830,000	43,528,000	42,350,000	34,558,000	43,528,000	54,174,000	52,830,000	40,694,000	36,448,000
Prepaid expenses	18,565,000	22,018,000	23,588,000	23,912,000	18,459,000	11,551,000	11,712,000	12,524,000	23,588,000	11,712,000	22,018,000	11,551,000	18,565,000	18,459,000
Other current assets	37,865,000	31,529,000	20,475,000	20,302,000	24,597,000	31,302,000	17,738,000	16,699,000	20,475,000	17,738,000	31,529,000	31,302,000	37,865,000	24,597,000
Total current assets	383,088,000	384,847,000	342,664,000	329,292,000	324,408,000	340,111,000	322,033,000	321,210,000	342,664,000	322,033,000	384,847,000	340,111,000	383,088,000	324,408,000
Other non-current assets	1,636,000	1,592,000	1,547,000	1,633,000	1,654,000	1,426,000	1,415,000	1,469,000	1,547,000	1,415,000	1,592,000	1,426,000	1,636,000	1,654,000
Total intangibles and other assets	229,836,000	238,473,000	237,926,000	236,794,000	236,923,000	241,003,000	242,025,000	244,903,000	237,926,000	242,025,000	238,473,000	241,003,000	229,836,000	236,923,000
Total assets	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000	616,620,000	597,148,000	660,532,000	613,393,000	649,638,000	593,987,000
Accounts payable	141,164,000	130,406,000	126,382,000	114,616,000	123,012,000	129,869,000	139,914,000	129,894,000	126,382,000	139,914,000	130,406,000	129,869,000	141,164,000	123,012,000
Accrued expenses	34,391,000	32,889,000	27,409,000	32,422,000	29,755,000	20,788,000	16,096,000	23,939,000	27,409,000	16,096,000	32,889,000	20,788,000	34,391,000	29,755,000
Other current liabilities	24,078,000	30,416,000	25,210,000	24,359,000	22,576,000	25,760,000	24,200,000	24,401,000	25,210,000	24,200,000	30,416,000	25,760,000	24,078,000	22,576,000
Deferred revenue	17,620,000	15,709,000	15,392,000	16,885,000	16,402,000	13,409,000	15,180,000	14,589,000	15,392,000	15,180,000	15,709,000	13,409,000	17,620,000	16,402,000
Total current liabilities	217,253,000	209,420,000	212,235,000	206,540,000	211,028,000	210,829,000	207,779,000	207,558,000	212,235,000	207,779,000	209,420,000	210,829,000	217,253,000	211,028,000
Deferred income taxes	12,043,000	9,839,000	9,876,000	9,818,000	10,766,000	10,622,000	11,060,905	9,652,000	9,876,000	11,060,905	9,839,000	10,622,000	12,043,000	10,766,000
Other long-term liabilities	7,399,000	2,595,000	2,625,000	2,697,000	2,564,000	2,591,000	2,995,000	3,129,000	2,625,000	2,995,000	2,595,000	2,591,000	7,399,000	2,564,000
Total liabilities	365,093,000	371,038,000	343,394,000	332,746,000	331,826,000	357,776,000	348,100,000	348,142,000	343,394,000	348,100,000	371,038,000	357,776,000	365,093,000	331,826,000
Accumulated other comprehensive loss	(19,229,000)	(12,922,000)	(15,090,000)	(18,970,000)	(20,949,000)	(15,668,000)	(15,467,000)	(14,077,000)	(15,090,000)	(15,467,000)	(12,922,000)	(15,668,000)	(19,229,000)	(20,949,000)
Retained earnings	124,442,000	124,369,000	117,504,000	113,147,000	108,082,000	103,918,000	99,693,000	101,734,000	117,504,000	99,693,000	124,369,000	103,918,000	124,442,000	108,082,000
Total stockholders' equity	284,545,000	289,494,000	273,226,000	267,340,000	262,161,000	255,617,000	249,048,000	251,179,000	273,226,000	249,048,000	289,494,000	255,617,000	284,545,000	262,161,000	252,432,000	$ 290,260,000
Total liabilities and stockholders' equity	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000	616,620,000	597,148,000	660,532,000	613,393,000	649,638,000	593,987,000
As Previously Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable, net of allowance for doubtful accounts of $3,534 and $2,622, respectively	203,306,000	208,382,000	187,028,000	182,874,000	190,438,000	193,297,000	200,629,000		182,874,000		182,874,000		182,874,000
Revenue	300,950,000	288,386,000	279,530,000	267,390,000	270,418,000	279,993,000	269,220,000	271,073,000	546,920,000	540,292,000	835,306,000	820,286,000	1,136,256,000	1,090,704,000	1,029,353,000
Cost of Goods Sold		215,867,000	209,303,000	203,113,000		212,212,000	204,126,000	209,127,000	412,416,000	413,253,000	628,282,000	625,465,000	857,921,000	827,156,000	789,159,000
Gross profit	71,311,000	72,519,000	70,227,000	64,277,000	68,727,000	67,781,000	65,093,000	61,946,000	134,504,000	127,039,000	207,024,000	194,821,000	278,335,000	263,548,000	240,194,000
Selling, general and administrative		57,134,000	55,086,000	53,427,000		52,601,000	51,418,000	51,492,000	108,513,000	102,910,000	165,647,000	155,511,000	225,738,000	209,967,000	197,291,000
Income (loss) from operations		12,236,000	10,075,000	8,986,000		8,860,000	1,056,000	603,000	19,061,000	1,659,000	31,297,000	10,520,000	38,530,000	19,563,000	(13,093,000)
Income (loss) before taxes		11,495,000	7,884,000	7,793,000		7,581,000	386,000	(621,000)	15,678,000	(235,000)	27,173,000	7,347,000	32,110,000	15,325,000	(20,771,000)
Income tax expense (benefit)		3,967,000	3,391,000	2,337,000		3,240,000	2,710,000	2,072,000	5,727,000	4,782,000	9,694,000	8,023,000	13,131,000	10,955,000	12,292,000
Net income (loss)	$ 1,500,000	$ 7,528,000	$ 4,493,000	$ 5,456,000	$ 5,047,000	$ 4,341,000	$ (2,324,000)	$ (2,693,000)	$ 9,951,000	$ (5,017,000)	$ 17,479,000	$ (676,000)	$ 18,979,000	$ 4,370,000	$ (33,063,000)
Basic earnings (loss) per share (in USD per share)	$ 0.03	$ 0.14	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.05)	$ 0.19	$ (0.09)	$ 0.32	$ (0.01)	$ 0.35	$ 0.08	$ (0.63)
Diluted earnings (loss) per share (in USD per share)	$ 0.03	$ 0.14	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.05)	$ 0.18	$ (0.09)	$ 0.32	$ (0.01)	$ 0.35	$ 0.08	$ (0.63)
Comprehensive income (loss)		$ 9,696,000	$ 8,373,000	$ 7,435,000		$ 4,140,000	$ (3,714,000)	$ (3,163,000)	$ 15,810,000	$ (6,877,000)	$ 25,506,000	$ (2,201,000)	$ 20,697,000	$ (2,436,000)	$ (41,655,000)
Deferred income taxes				(16,000)				(389,000)	76,000	450,000	(82,000)	677,000	3,744,000	4,084,000	6,947,000
Increase decrease in accounts receivable and unbilled receivables				(7,318,000)				(16,256,000)	(29,395,000)	(2,366,000)	(38,108,000)	(12,798,000)	(40,959,000)	1,809,000	(10,361,000)
Increase (Decrease) in Inventories				1,300,000				(1,388,000)	3,446,000	(2,573,000)	(17,106,000)	(12,050,000)	(3,169,000)	1,690,000	(8,188,000)
Increase (Decrease) in Prepaid Expense and Other Assets				(979,000)				16,382,000	(957,000)	16,255,000	(10,401,000)	3,574,000	(8,989,000)	2,442,000	(6,138,000)
Accounts payable				(6,890,000)				(40,196,000)	4,304,000	(33,984,000)	8,312,000	(40,264,000)	13,320,000	(48,955,000)	26,199,000
Accrued expenses and other liabilities				5,057,000				11,518,000	851,000	4,632,000	11,722,000	7,861,000	11,670,000	12,759,000	2,118,000
Net cash provided by operating activities				120,000				(24,566,000)	(1,687,000)	(848,000)	(12,383,000)	(23,632,000)	16,147,000	10,525,000	43,402,000
Unbilled revenue	$ 49,389,000	50,130,000	36,515,000	35,712,000	$ 32,723,000	40,505,000	27,857,000	34,548,000	36,515,000	27,857,000	50,130,000	40,505,000	49,389,000	32,723,000
Inventories	34,807,000	48,744,000	28,192,000	30,338,000	31,638,000	45,377,000	35,901,000	34,715,000	28,192,000	35,901,000	48,744,000	45,377,000	34,807,000	31,638,000
Prepaid expenses	19,638,000				18,772,000	11,984,000	12,145,000	12,957,000		12,145,000		11,984,000	19,638,000	18,772,000
Other current assets	32,694,000	31,850,000	20,949,000	20,598,000	24,769,000	30,528,000	17,647,000	16,708,000	20,949,000	17,647,000	31,850,000	30,528,000	32,694,000	24,769,000
Total current assets	373,802,000	383,730,000	341,163,000	327,508,000	321,700,000	339,619,000	318,453,000	320,485,000	341,163,000	318,453,000	383,730,000	339,619,000	373,802,000	321,700,000
Other non-current assets	1,382,000	1,312,000	1,267,000	1,353,000	1,374,000				1,267,000		1,312,000		1,382,000	1,374,000
Total intangibles and other assets	229,503,000	238,193,000	237,646,000	236,514,000	236,642,000				237,646,000		238,193,000		229,503,000	236,642,000
Total assets	640,019,000	659,135,000	614,839,000	598,022,000	590,999,000	612,901,000	593,567,000	598,596,000	614,839,000	593,567,000	659,135,000	612,901,000	640,019,000	590,999,000
Accounts payable	134,609,000	129,600,000	125,593,000	114,399,000	121,289,000	129,980,000	136,260,000	130,048,000	125,593,000	136,260,000	129,600,000	129,980,000	134,609,000	121,289,000
Accrued expenses	33,694,000	32,994,000	27,567,000	32,547,000	30,068,000	21,037,000	17,818,000	24,257,000	27,567,000	17,818,000	32,994,000	21,037,000	33,694,000	30,068,000
Other current liabilities	20,956,000	31,589,000	26,163,000	25,231,000	22,971,000				26,163,000		31,589,000		20,956,000	22,971,000
Deferred revenue	13,685,000	11,707,000	11,585,000	12,405,000	12,078,000	9,755,000	11,793,000	10,975,000	11,585,000	11,793,000	11,707,000	9,755,000	13,685,000	12,078,000
Total current liabilities	202,943,000	205,890,000	208,750,000	202,840,000	205,688,000	207,535,000	202,460,000	204,416,000	208,750,000	202,460,000	205,890,000	207,535,000	202,943,000	205,688,000
Deferred income taxes	12,348,000	9,834,000	9,852,000	9,848,000	11,291,000	11,594,000	11,620,000	10,476,000	9,852,000	11,620,000	9,834,000	11,594,000	12,348,000	11,291,000
Other long-term liabilities	6,771,000	1,958,000	1,988,000	2,060,000	1,926,000	2,235,000	2,639,000	2,772,000	1,988,000	2,639,000	1,958,000	2,235,000	6,771,000	1,926,000
Total liabilities	350,461,000	366,866,000	339,248,000	328,439,000	326,373,000	355,098,000	342,984,000	345,466,000	339,248,000	342,984,000	366,866,000	355,098,000	350,461,000	326,373,000
Accumulated other comprehensive loss	(19,079,000)	(12,772,000)	(14,940,000)	(18,820,000)	(20,799,000)	(15,518,000)	(15,853,000)	(14,463,000)	(14,940,000)	(15,853,000)	(12,772,000)	(15,518,000)	(19,079,000)	(20,799,000)
Retained earnings	129,305,000	126,994,000	119,719,000	115,240,000	110,397,000	105,954,000	101,614,000	104,071,000	119,719,000	101,614,000	126,994,000	105,954,000	129,305,000	110,397,000
Total stockholders' equity	289,559,000	292,269,000	275,591,000	269,583,000	264,626,000	257,803,000	250,583,000	253,130,000	275,591,000	250,583,000	292,269,000	257,803,000	289,559,000	264,626,000
Total liabilities and stockholders' equity	640,019,000	659,135,000	614,839,000	598,022,000	590,999,000	612,901,000	593,567,000	598,596,000	614,839,000	593,567,000	659,135,000	612,901,000	640,019,000	590,999,000
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable, net of allowance for doubtful accounts of $3,534 and $2,622, respectively	(2,507,000)	(2,140,000)	(2,315,000)	(410,000)	(4,779,000)	(5,050,000)	(4,378,000)		(410,000)		(410,000)		(410,000)
Revenue	4,417,000	137,000	536,000	(2,985,000)	5,309,000	(3,991,000)	2,992,000	(612,000)	(2,449,000)	2,381,000	(2,312,000)	(1,611,000)	2,105,000	3,698,000	(461,000)
Cost of Goods Sold		735,000	717,000	(3,412,000)		(2,791,000)	2,106,000	(192,000)	(2,695,000)	1,914,000	(1,959,000)	(877,000)	4,982,000	4,682,000	(297,000)
Gross profit	(2,524,000)	(598,000)	(181,000)	427,000	(250,000)	(1,200,000)	886,000	(420,000)	246,000	467,000	(353,000)	(734,000)	(2,877,000)	(984,000)	(164,000)
Selling, general and administrative		52,000	(32,000)	188,000		(135,000)	203,000	(15,000)	156,000	189,000	208,000	54,000	1,515,000	(443,000)	(44,000)
Income (loss) from operations		(649,000)	(149,000)	239,000		(1,064,000)	683,000	(405,000)	90,000	278,000	(561,000)	(788,000)	(4,392,000)	(541,000)	(120,000)
Income (loss) before taxes		(650,000)	(149,000)	239,000		(1,064,000)	683,000	(405,000)	90,000	277,000	(562,000)	(788,000)	(4,392,000)	(542,000)	(120,000)
Income tax expense (benefit)		(239,000)	(29,000)	17,000		(948,000)	264,000	38,000	(11,000)	302,000	(250,000)	(647,000)	(1,843,000)	(121,000)	(794,000)
Net income (loss)	$ (2,238,000)	$ (411,000)	$ (120,000)	$ 222,000	$ (282,000)	$ (116,000)	$ 419,000	$ (443,000)	$ 101,000	$ (26,000)	$ (311,000)	$ (141,000)	$ (2,549,000)	$ (421,000)	$ 674,000
Basic earnings (loss) per share (in USD per share)	$ (0.04)	$ (0.01)	$ 0.00	$ 0.01	$ 0.00	$ 0.00	$ 0.00	$ (0.01)	$ 0.00	$ 0.00	$ 0.00	$ (0.01)	$ (0.04)	$ (0.01)	$ 0.02
Diluted earnings (loss) per share (in USD per share)	$ (0.04)	$ (0.01)	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ (0.01)	$ 0.00	$ 0.00	$ (0.01)	$ (0.01)	$ (0.05)	$ (0.01)	$ 0.02
Comprehensive income (loss)		$ (411,000)	$ (120,000)	$ 222,000		$ (116,000)	$ 419,000	$ (248,000)	$ 101,000	$ 169,000	$ (311,000)	$ (482,000)	$ (2,547,000)	$ (762,000)	$ 1,015,000
Deferred income taxes				494,000				(157,000)	548,000	107,000	530,000	(305,000)	328,000	142,000	(1,068,000)
Increase decrease in accounts receivable and unbilled receivables				2,638,000				393,000	2,775,000	(2,372,000)	2,376,000	1,225,000	(918,000)	(4,460,000)	219,000
Increase (Decrease) in Inventories				(1,526,000)				1,841,000	(1,556,000)	1,848,000	(620,000)	2,023,000	(1,076,000)	4,665,000	1,488,000
Increase (Decrease) in Prepaid Expense and Other Assets				(188,000)				(10,414,000)	(14,000)	(10,513,000)	(166,000)	(11,196,000)	(4,558,000)	(10,648,000)	(1,998,000)
Accounts payable				(1,506,000)				8,670,000	(934,000)	12,478,000	(917,000)	8,713,000	4,832,000	10,547,000	(1,097,000)
Accrued expenses and other liabilities				(134,000)				109,000	(920,000)	(1,522,000)	(891,000)	(318,000)	3,850,000	174,000	1,464,000
Net cash provided by operating activities				0				0	0	0	0	0	(91,000)	0	$ 0
Unbilled revenue	$ 627,000	(1,485,000)	(2,251,000)	(1,941,000)	$ (1,207,000)	(2,523,000)	1,345,000	(2,091,000)	(2,251,000)	1,345,000	(1,485,000)	(2,523,000)	627,000	(1,207,000)
Inventories	5,887,000	5,430,000	6,366,000	6,336,000	4,810,000	7,453,000	7,627,000	7,635,000	6,366,000	7,627,000	5,430,000	7,453,000	5,887,000	4,810,000
Prepaid expenses	(1,073,000)				(313,000)	(433,000)	(433,000)	(433,000)		(433,000)		(433,000)	(1,073,000)	(313,000)
Other current assets	5,171,000	(321,000)	(474,000)	(296,000)	(172,000)	774,000	92,000	(8,000)	(474,000)	92,000	(321,000)	774,000	5,171,000	(172,000)
Total current assets	9,286,000	1,117,000	1,501,000	1,784,000	2,708,000	492,000	3,580,000	725,000	1,501,000	3,580,000	1,117,000	492,000	9,286,000	2,708,000
Other non-current assets	254,000	280,000	280,000	280,000	280,000				280,000		280,000		254,000	280,000
Total intangibles and other assets	333,000	280,000	280,000	280,000	280,000				280,000		280,000		333,000	280,000
Total assets	9,619,000	1,397,000	1,781,000	2,064,000	2,988,000	492,000	3,582,000	725,000	1,781,000	3,582,000	1,397,000	492,000	9,619,000	2,988,000
Accounts payable	6,555,000	806,000	789,000	217,000	1,723,000	(111,000)	3,654,000	(154,000)	789,000	3,654,000	806,000	(111,000)	6,555,000	1,723,000
Accrued expenses	697,000	(105,000)	(158,000)	(125,000)	(313,000)	(249,000)	(1,722,000)	(318,000)	(158,000)	(1,722,000)	(105,000)	(249,000)	697,000	(313,000)
Other current liabilities	3,122,000	(1,173,000)	(953,000)	(872,000)	(395,000)				(953,000)		(1,173,000)		3,122,000	(395,000)
Deferred revenue	3,935,000	4,002,000	3,807,000	4,480,000	4,324,000	3,654,000	3,387,000	3,614,000	3,807,000	3,387,000	4,002,000	3,654,000	3,935,000	4,324,000
Total current liabilities	14,310,000	3,530,000	3,485,000	3,700,000	5,340,000	3,294,000	5,319,000	3,142,000	3,485,000	5,319,000	3,530,000	3,294,000	14,310,000	5,340,000
Deferred income taxes	(305,000)	5,000	24,000	(30,000)	(525,000)	(972,000)	(559,000)	(824,000)	24,000	(559,000)	5,000	(972,000)	(305,000)	(525,000)
Other long-term liabilities	628,000	637,000	637,000	637,000	638,000	356,000	356,000	358,000	637,000	356,000	637,000	356,000	628,000	638,000
Total liabilities	14,632,000	4,172,000	4,146,000	4,307,000	5,453,000	2,678,000	5,116,000	2,676,000	4,146,000	5,116,000	4,172,000	2,678,000	14,632,000	5,453,000
Accumulated other comprehensive loss	(150,000)	(150,000)	(150,000)	(150,000)	(150,000)	(150,000)	386,000	386,000	(150,000)	386,000	(150,000)	(150,000)	(150,000)	(150,000)
Retained earnings	(4,863,000)	(2,625,000)	(2,215,000)	(2,093,000)	(2,315,000)	(2,036,000)	(1,921,000)	(2,337,000)	(2,215,000)	(1,921,000)	(2,625,000)	(2,036,000)	(4,863,000)	(2,315,000)
Total stockholders' equity	(5,014,000)	(2,775,000)	(2,365,000)	(2,243,000)	(2,465,000)	(2,186,000)	(1,535,000)	(1,951,000)	(2,365,000)	(1,535,000)	(2,775,000)	(2,186,000)	(5,014,000)	(2,465,000)
Total liabilities and stockholders' equity	$ 9,619,000	$ 1,397,000	$ 1,781,000	$ 2,064,000	$ 2,988,000	$ 492,000	$ 3,581,000	$ 725,000	$ 1,781,000	$ 3,581,000	$ 1,397,000	$ 492,000	9,619,000	2,988,000
Unbilled Revenue | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue													1,000,000
Unbilled Revenue on Statement of Income													$ 2,100,000	$ 1,000,000

XML

Restatement and Revision of Prior Period Financial Statements - Condensed Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Comprehensive income (loss)		9,284	8,253	7,657		4,024	(3,295)	(3,411)	15,911	(6,708)	25,196	(2,683)	18,150	(3,198)	(40,640)
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	1,500	7,528	4,493	5,456	5,047	4,341	(2,324)	(2,693)	9,951	(5,017)	17,479	(676)	18,979	4,370	(33,063)
Comprehensive income (loss)		9,696	8,373	7,435		4,140	(3,714)	(3,163)	15,810	(6,877)	25,506	(2,201)	20,697	(2,436)	(41,655)
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (2,238)	(411)	(120)	222	$ (282)	(116)	419	(443)	101	(26)	(311)	(141)	(2,549)	(421)	674
Comprehensive income (loss)		$ (411)	$ (120)	$ 222		$ (116)	$ 419	$ (248)	$ 101	$ 169	$ (311)	$ (482)	$ (2,547)	$ (762)	$ 1,015

XML

Restatement and Revision of Prior Period Financial Statements - Condensed Consolidated Balance Sheet (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable	$ 205,386,000	$ 200,799,000	$ 206,242,000	$ 184,713,000	$ 182,464,000	$ 185,659,000	$ 188,247,000	$ 196,251,000
Unbilled revenue	50,016,000	48,645,000	34,264,000	33,771,000	31,516,000	37,982,000	29,202,000	32,457,000
Inventories	40,694,000	54,174,000	34,558,000	36,674,000	36,448,000	52,830,000	43,528,000	42,350,000
Prepaid expenses	18,565,000	22,018,000	23,588,000	23,912,000	18,459,000	11,551,000	11,712,000	12,524,000
Other current assets	37,865,000	31,529,000	20,475,000	20,302,000	24,597,000	31,302,000	17,738,000	16,699,000
Total current assets	383,088,000	384,847,000	342,664,000	329,292,000	324,408,000	340,111,000	322,033,000	321,210,000
Deferred Income Taxes, Intangibles And Other Non Current Assets	691,000	1,432,000	1,281,000	1,440,000	1,031,000	1,123,000	882,000	788,000
Other non-current assets	1,636,000	1,592,000	1,547,000	1,633,000	1,654,000	1,426,000	1,415,000	1,469,000
Total intangibles and other assets	229,836,000	238,473,000	237,926,000	236,794,000	236,923,000	241,003,000	242,025,000	244,903,000
Total assets	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000
Accounts payable	141,164,000	130,406,000	126,382,000	114,616,000	123,012,000	129,869,000	139,914,000	129,894,000
Accrued expenses	34,391,000	32,889,000	27,409,000	32,422,000	29,755,000	20,788,000	16,096,000	23,939,000
Other current liabilities	24,078,000	30,416,000	25,210,000	24,359,000	22,576,000	25,760,000	24,200,000	24,401,000
Deferred revenue	17,620,000	15,709,000	15,392,000	16,885,000	16,402,000	13,409,000	15,180,000	14,589,000
Total current liabilities	217,253,000	209,420,000	212,235,000	206,540,000	211,028,000	210,829,000	207,779,000	207,558,000
Deferred income taxes	12,043,000	9,839,000	9,876,000	9,818,000	10,766,000	10,622,000	11,060,905	9,652,000
Other long-term liabilities	7,399,000	2,595,000	2,625,000	2,697,000	2,564,000	2,591,000	2,995,000	3,129,000
Total liabilities	365,093,000	371,038,000	343,394,000	332,746,000	331,826,000	357,776,000	348,100,000	348,142,000
Accumulated other comprehensive loss	(19,229,000)	(12,922,000)	(15,090,000)	(18,970,000)	(20,949,000)	(15,668,000)	(15,467,000)	(14,077,000)
Retained earnings	124,442,000	124,369,000	117,504,000	113,147,000	108,082,000	103,918,000	99,693,000	101,734,000
Total stockholders' equity	284,545,000	289,494,000	273,226,000	267,340,000	262,161,000	255,617,000	249,048,000	251,179,000	$ 252,432,000	$ 290,260,000
Total liabilities and stockholders' equity	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable	206,712,000	203,306,000	208,382,000	187,028,000	182,874,000	190,438,000	193,297,000	200,629,000
Unbilled revenue	49,389,000	50,130,000	36,515,000	35,712,000	32,723,000	40,505,000	27,857,000	34,548,000
Inventories	34,807,000	48,744,000	28,192,000	30,338,000	31,638,000	45,377,000	35,901,000	34,715,000
Prepaid expenses	19,638,000				18,772,000	11,984,000	12,145,000	12,957,000
Other current assets	32,694,000	31,850,000	20,949,000	20,598,000	24,769,000	30,528,000	17,647,000	16,708,000
Total current assets	373,802,000	383,730,000	341,163,000	327,508,000	321,700,000	339,619,000	318,453,000	320,485,000
Deferred Income Taxes, Intangibles And Other Non Current Assets	612,000
Other non-current assets	1,382,000	1,312,000	1,267,000	1,353,000	1,374,000
Total intangibles and other assets	229,503,000	238,193,000	237,646,000	236,514,000	236,642,000
Total assets	640,019,000	659,135,000	614,839,000	598,022,000	590,999,000	612,901,000	593,567,000	598,596,000
Accounts payable	134,609,000	129,600,000	125,593,000	114,399,000	121,289,000	129,980,000	136,260,000	130,048,000
Accrued expenses	33,694,000	32,994,000	27,567,000	32,547,000	30,068,000	21,037,000	17,818,000	24,257,000
Other current liabilities	20,956,000	31,589,000	26,163,000	25,231,000	22,971,000
Deferred revenue	13,685,000	11,707,000	11,585,000	12,405,000	12,078,000	9,755,000	11,793,000	10,975,000
Total current liabilities	202,943,000	205,890,000	208,750,000	202,840,000	205,688,000	207,535,000	202,460,000	204,416,000
Deferred income taxes	12,348,000	9,834,000	9,852,000	9,848,000	11,291,000	11,594,000	11,620,000	10,476,000
Other long-term liabilities	6,771,000	1,958,000	1,988,000	2,060,000	1,926,000	2,235,000	2,639,000	2,772,000
Total liabilities	350,461,000	366,866,000	339,248,000	328,439,000	326,373,000	355,098,000	342,984,000	345,466,000
Accumulated other comprehensive loss	(19,079,000)	(12,772,000)	(14,940,000)	(18,820,000)	(20,799,000)	(15,518,000)	(15,853,000)	(14,463,000)
Retained earnings	129,305,000	126,994,000	119,719,000	115,240,000	110,397,000	105,954,000	101,614,000	104,071,000
Total stockholders' equity	289,559,000	292,269,000	275,591,000	269,583,000	264,626,000	257,803,000	250,583,000	253,130,000
Total liabilities and stockholders' equity	640,019,000	659,135,000	614,839,000	598,022,000	590,999,000	612,901,000	593,567,000	598,596,000
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable	(1,326,000)	(2,507,000)	(2,140,000)	(2,315,000)	(410,000)	(4,779,000)	(5,050,000)	(4,378,000)
Unbilled revenue	627,000	(1,485,000)	(2,251,000)	(1,941,000)	(1,207,000)	(2,523,000)	1,345,000	(2,091,000)
Inventories	5,887,000	5,430,000	6,366,000	6,336,000	4,810,000	7,453,000	7,627,000	7,635,000
Prepaid expenses	(1,073,000)				(313,000)	(433,000)	(433,000)	(433,000)
Other current assets	5,171,000	(321,000)	(474,000)	(296,000)	(172,000)	774,000	92,000	(8,000)
Total current assets	9,286,000	1,117,000	1,501,000	1,784,000	2,708,000	492,000	3,580,000	725,000
Deferred Income Taxes, Intangibles And Other Non Current Assets	79,000
Other non-current assets	254,000	280,000	280,000	280,000	280,000
Total intangibles and other assets	333,000	280,000	280,000	280,000	280,000
Total assets	9,619,000	1,397,000	1,781,000	2,064,000	2,988,000	492,000	3,582,000	725,000
Accounts payable	6,555,000	806,000	789,000	217,000	1,723,000	(111,000)	3,654,000	(154,000)
Accrued expenses	697,000	(105,000)	(158,000)	(125,000)	(313,000)	(249,000)	(1,722,000)	(318,000)
Other current liabilities	3,122,000	(1,173,000)	(953,000)	(872,000)	(395,000)
Deferred revenue	3,935,000	4,002,000	3,807,000	4,480,000	4,324,000	3,654,000	3,387,000	3,614,000
Total current liabilities	14,310,000	3,530,000	3,485,000	3,700,000	5,340,000	3,294,000	5,319,000	3,142,000
Deferred income taxes	(305,000)	5,000	24,000	(30,000)	(525,000)	(972,000)	(559,000)	(824,000)
Other long-term liabilities	628,000	637,000	637,000	637,000	638,000	356,000	356,000	358,000
Total liabilities	14,632,000	4,172,000	4,146,000	4,307,000	5,453,000	2,678,000	5,116,000	2,676,000
Accumulated other comprehensive loss	(150,000)	(150,000)	(150,000)	(150,000)	(150,000)	(150,000)	386,000	386,000
Retained earnings	(4,863,000)	(2,625,000)	(2,215,000)	(2,093,000)	(2,315,000)	(2,036,000)	(1,921,000)	(2,337,000)
Total stockholders' equity	(5,014,000)	(2,775,000)	(2,365,000)	(2,243,000)	(2,465,000)	(2,186,000)	(1,535,000)	(1,951,000)
Total liabilities and stockholders' equity	9,619,000	$ 1,397,000	$ 1,781,000	$ 2,064,000	2,988,000	$ 492,000	$ 3,581,000	$ 725,000
Unbilled Revenue | Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts Payable	$ 1,300,000				$ 900,000

XML

Restatement and Revision of Prior Period Financial Statements - Condensed Consolidated Statements of Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Bad debt provision				175				656	82	0	268	1,433	454	2,171	1,685
Deferred income taxes				478				(546)	624	557	448	372	4,072	4,226	5,879
Accounts receivable and unbilled revenue				4,680				15,863	26,620	4,738	35,732	11,573	41,877	2,651	10,580
Inventories				226				(453)	(1,890)	725	17,726	10,027	4,245	(6,355)	9,676
Prepaid expenses and other assets				1,167				(5,968)	971	(5,742)	10,567	7,622	13,547	8,206	4,140
Accounts payable				(8,396)				(31,526)	3,370	(21,506)	7,395	(31,551)	18,152	(38,408)	25,102
Accrued expenses and other liabilities				4,923				11,627	(69)	3,110	10,830	7,543	15,520	12,933	3,582
Net cash provided by operating activities				120				(24,566)	(1,687)	(848)	(12,383)	(23,632)	16,056	10,525	43,402
Repurchases of common stock				4,342				0	10,041	0	10,041	0	10,885	0	4,897
Net cash used in financing activities													(4,881)	3,570	(18,386)
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	(2,238)	(411)	(120)	222	(282)	(116)	419	(443)	101	(26)	(311)	(141)	(2,549)	(421)	674
Bad debt provision															(264)
Deferred income taxes				494				(157)	548	107	530	(305)	328	142	(1,068)
Accounts receivable and unbilled revenue				(2,638)				(393)	(2,775)	2,372	(2,376)	(1,225)	918	4,460	(219)
Inventories				1,526				(1,841)	1,556	(1,848)	620	(2,023)	1,076	(4,665)	(1,488)
Prepaid expenses and other assets				188				10,414	14	10,513	166	11,196	4,558	10,648	1,998
Accounts payable				(1,506)				8,670	(934)	12,478	(917)	8,713	4,832	10,547	(1,097)
Accrued expenses and other liabilities				(134)				109	(920)	(1,522)	(891)	(318)	3,850	174	1,464
Net cash provided by operating activities				0				0	0	0	0	0	(91)	0	0
Repurchases of common stock													(91)
Net cash used in financing activities													91
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ 1,500	$ 7,528	$ 4,493	5,456	$ 5,047	$ 4,341	$ (2,324)	(2,693)	9,951	(5,017)	17,479	(676)	18,979	4,370	(33,063)
Bad debt provision															1,949
Deferred income taxes				(16)				(389)	76	450	(82)	677	3,744	4,084	6,947
Accounts receivable and unbilled revenue				7,318				16,256	29,395	2,366	38,108	12,798	40,959	(1,809)	10,361
Inventories				(1,300)				1,388	(3,446)	2,573	17,106	12,050	3,169	(1,690)	8,188
Prepaid expenses and other assets				979				(16,382)	957	(16,255)	10,401	(3,574)	8,989	(2,442)	6,138
Accounts payable				(6,890)				(40,196)	4,304	(33,984)	8,312	(40,264)	13,320	(48,955)	26,199
Accrued expenses and other liabilities				5,057				11,518	851	4,632	11,722	7,861	11,670	12,759	2,118
Net cash provided by operating activities				$ 120				$ (24,566)	$ (1,687)	$ (848)	$ (12,383)	$ (23,632)	16,147	$ 10,525	$ 43,402
Repurchases of common stock													10,976
Net cash used in financing activities													$ (4,972)

XML

Restatement and Revision of Prior Period Quarterly Financial Statements - Condensed Consolidated Statement of Income (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Changes and Error Corrections [Abstract]
Revenue	$ 305,367	$ 288,523	$ 280,066	$ 264,405	$ 275,727	$ 276,002	$ 272,212	$ 270,461	$ 544,471	$ 542,673	$ 832,994	$ 818,675	$ 1,138,361	$ 1,094,402	$ 1,028,892
Cost of Goods Sold		216,602	210,020	199,701		209,421	206,232	208,935	409,721	415,167	626,323	624,588	862,903	831,838	788,862
Gross profit	68,787	71,921	70,046	64,704	68,477	66,581	65,980	61,526	134,750	127,506	206,671	194,087	275,458	262,564	240,030
Selling, general and administrative		57,186	55,054	53,615		52,466	51,622	51,477	108,669	103,099	165,855	155,565	227,253	209,524	197,247
Depreciation and amortization		3,317	3,182	2,904		5,066	4,720	4,596	6,086	9,316	9,403	14,382	13,390	17,916	17,472
Change in fair value of contingent consideration liability		(167)	1,884	(1,040)		788	7,276	1,911	844	9,187	677	9,975	677	10,417	(270)
Goodwill impairment charge													0	0	37,539
Intangible asset impairment charges									0	789			0	70	202
Restructuring charges		0	0	0		465	623	3,344	0	3,967	0	4,433	0	5,615	1,053
Income (loss) from operations		11,585	9,926	9,225		7,796	1,739	198	19,151	1,937	30,736	9,732	34,138	19,022	(13,213)
Interest income		31	12	34		26	24	14	46	38	77	63	97	86	69
Interest expense		(1,198)	(1,038)	(1,003)		(1,190)	(985)	(1,077)	(2,041)	(2,062)	(3,239)	(3,252)	(4,729)	(4,171)	(4,612)
Other, net		426	(1,164)	(224)		(114)	291	(161)	(1,388)	130	(962)	16	(1,788)	(154)	(3,135)
Total other expense		(741)	(2,190)	(1,193)		(1,279)	(670)	(1,224)	(3,383)	(1,894)	(4,124)	(3,173)	(6,420)	(4,239)	(7,678)
Income (loss) before taxes		10,844	7,736	8,032		6,517	1,069	(1,026)	15,768	42	26,612	6,559	27,718	14,783	(20,891)
Income tax expense (benefit)		3,728	3,362	2,354		2,292	2,974	2,110	5,716	5,084	9,444	7,376	11,288	10,834	11,498
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Basic earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.11	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.19	$ (0.09)	$ 0.32	$ (0.02)	$ 0.31	$ 0.07	$ (0.61)
Diluted earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.18	$ (0.09)	$ 0.31	$ (0.02)	$ 0.30	$ 0.07	$ (0.61)
Comprehensive income (loss)		$ 9,284	$ 8,253	$ 7,657		$ 4,024	$ (3,295)	$ (3,411)	$ 15,911	$ (6,708)	$ 25,196	$ (2,683)	$ 18,150	$ (3,198)	$ (40,640)

XML

Restatement and Revision of Prior Period Quarterly Financial Statements - Condensed Consolidated Balance Sheet (Unaudited) (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounting Changes and Error Corrections [Abstract]
Cash and Cash Equivalents, at Carrying Value	$ 30,562,000	$ 27,682,000	$ 23,537,000	$ 29,920,000	$ 30,924,000	$ 20,787,000	$ 31,606,000	$ 20,929,000	$ 30,755,000	$ 22,578,000
Accounts receivable	205,386,000	200,799,000	206,242,000	184,713,000	182,464,000	185,659,000	188,247,000	196,251,000
Unbilled revenue	50,016,000	48,645,000	34,264,000	33,771,000	31,516,000	37,982,000	29,202,000	32,457,000
Inventories	40,694,000	54,174,000	34,558,000	36,674,000	36,448,000	52,830,000	43,528,000	42,350,000
Prepaid expenses	18,565,000	22,018,000	23,588,000	23,912,000	18,459,000	11,551,000	11,712,000	12,524,000
Other current assets	37,865,000	31,529,000	20,475,000	20,302,000	24,597,000	31,302,000	17,738,000	16,699,000
Total current assets	383,088,000	384,847,000	342,664,000	329,292,000	324,408,000	340,111,000	322,033,000	321,210,000
Property, Plant and Equipment, Net	36,714,000	37,212,000	36,030,000	34,000,000	32,656,000	32,279,000	33,089,000	33,208,000
Goodwill	199,946,000	206,704,000	205,399,000	203,269,000	202,700,000	204,978,000	204,897,000	206,069,000	206,257,000
Intangible Assets, Net (Excluding Goodwill)	27,563,000	28,745,000	29,699,000	30,452,000	31,538,000	33,476,000	34,831,000	36,577,000
Deferred Income Taxes, Intangibles And Other Non Current Assets	691,000	1,432,000	1,281,000	1,440,000	1,031,000	1,123,000	882,000	788,000
Other non-current assets	1,636,000	1,592,000	1,547,000	1,633,000	1,654,000	1,426,000	1,415,000	1,469,000
Total intangibles and other assets	229,836,000	238,473,000	237,926,000	236,794,000	236,923,000	241,003,000	242,025,000	244,903,000
Total assets	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000
Accounts payable	141,164,000	130,406,000	126,382,000	114,616,000	123,012,000	129,869,000	139,914,000	129,894,000
Business Acquisitions Contingent Consideration At Fair Value Current	0	0	0	17,165,000	19,283,000	19,320,000	3,862,000	11,131,000
Due to Seller		0	17,842,000	1,093,000		1,683,000	8,527,000	3,604,000
Other current liabilities	24,078,000	30,416,000	25,210,000	24,359,000	22,576,000	25,760,000	24,200,000	24,401,000
Deferred revenue	17,620,000	15,709,000	15,392,000	16,885,000	16,402,000	13,409,000	15,180,000	14,589,000
Accrued expenses	34,391,000	32,889,000	27,409,000	32,422,000	29,755,000	20,788,000	16,096,000	23,939,000
Total current liabilities	217,253,000	209,420,000	212,235,000	206,540,000	211,028,000	210,829,000	207,779,000	207,558,000
Long-term Line of Credit, Noncurrent	128,398,000	149,184,000	118,658,000	113,691,000	107,468,000	133,734,000	111,566,000	118,615,000
Deferred income taxes	12,043,000	9,839,000	9,876,000	9,818,000	10,766,000	10,622,000	11,060,905	9,652,000
Other long-term liabilities	7,399,000	2,595,000	2,625,000	2,697,000	2,564,000	2,591,000	2,995,000	3,129,000
Total liabilities	365,093,000	371,038,000	343,394,000	332,746,000	331,826,000	357,776,000	348,100,000	348,142,000
Common Stock, Value, Issued	6,000	6,000	6,000	6,000	6,000	6,000	6,000	6,000
Additional Paid in Capital, Common Stock	235,199,000	232,979,000	230,030,000	228,106,000	224,480,000	219,085,000	216,540,000	215,723,000
Treasury Stock, Value	(55,873,000)	(54,938,000)	(59,224,000)	(54,949,000)	(49,458,000)	(51,724,000)	(51,724,000)	(52,207,000)
Accumulated other comprehensive loss	(19,229,000)	(12,922,000)	(15,090,000)	(18,970,000)	(20,949,000)	(15,668,000)	(15,467,000)	(14,077,000)
Retained earnings	124,442,000	124,369,000	117,504,000	113,147,000	108,082,000	103,918,000	99,693,000	101,734,000
Total stockholders' equity	284,545,000	289,494,000	273,226,000	267,340,000	262,161,000	255,617,000	249,048,000	251,179,000	$ 252,432,000	$ 290,260,000
Total liabilities and stockholders' equity	$ 649,638,000	$ 660,532,000	$ 616,620,000	$ 600,086,000	$ 593,987,000	613,393,000	597,148,000	599,321,000
Business Combination, Contingent Consideration, Liability, Noncurrent						$ 0	$ 14,699,000	$ 9,188,000

XML

Restatement and Revision of Prior Period Quarterly Financial Statements - Condensed Consolidated Statements of Cash Flows (Unaudited) (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accounting Changes and Error Corrections [Abstract]
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Depreciation, Depletion and Amortization				2,904				4,596	6,086	9,316	9,403	14,382	13,390	17,916	17,472
Share-based Compensation				1,419				1,241	2,921	2,358	5,296	4,097	6,820	5,572	5,873
Deferred income taxes				478				(546)	624	557	448	372	4,072	4,226	5,879
Change in fair value of contingent consideration liability		(167)	1,884	(1,040)		788	7,276	1,911	844	9,187	677	9,975	677	10,417	(270)
Intangible asset impairment charges									0	789			0	70	202
Bad debt provision				175				656	82	0	268	1,433	454	2,171	1,685
Excess Tax Benefit from Share-based Compensation, Operating Activities													0	(4,030)	0
Other Operating Activities, Cash Flow Statement				52				52	104	105	157	156	210	210	210
Increase decrease in accounts receivable and unbilled receivables				(4,680)				(15,863)	(26,620)	(4,738)	(35,732)	(11,573)	(41,877)	(2,651)	(10,580)
Increase (Decrease) in Inventories				(226)				453	1,890	(725)	(17,726)	(10,027)	(4,245)	6,355	(9,676)
Increase (Decrease) in Prepaid Expense and Other Assets				(1,167)				5,968	(971)	5,742	(10,567)	(7,622)	(13,547)	(8,206)	(4,140)
Accounts payable				(8,396)				(31,526)	3,370	(21,506)	7,395	(31,551)	18,152	(38,408)	25,102
Accrued expenses and other liabilities				4,923				11,627	(69)	3,110	10,830	7,543	15,520	12,933	3,582
Net cash provided by operating activities				120				(24,566)	(1,687)	(848)	(12,383)	(23,632)	16,056	10,525	43,402
Payments to Acquire Property, Plant, and Equipment				(3,042)				(3,987)	(7,024)	(7,445)	(10,274)	(10,502)	(12,483)	(13,319)	(15,034)
Net Cash Provided by (Used in) Investing Activities				(3,042)				(3,987)	(7,024)	(7,445)	(10,274)	(10,502)	(12,483)	(13,319)	(15,034)
Proceeds from (Repayments of) Lines of Credit				6,519				19,358	11,491	12,553	42,258	34,722	(867)	8,739	(5,281)
Net short-term secured borrowings (repayments)				(801)				(1,803)	37	104	633	(820)	20,709	405	(799)
Repurchases of common stock				(4,342)				0	(10,041)	0	(10,041)	0	(10,885)	0	(4,897)
Payment Of Contingent Consideration				0				(525)	(2,089)	(4,144)	(15,345)	(11,008)	(15,345)	(11,374)	(8,010)
Proceeds from Stock Options Exercised				189				984	1,319	1,090	1,824	2,002	2,663	2,636	1,195
Excess Tax Benefit from Share-based Compensation, Financing Activities				(95)				382	(119)	(474)	(850)	(680)	0	4,030	0
Proceeds from (Payments for) Other Financing Activities				1,470				18,396	598	9,129	18,479	24,216	(1,156)	(866)	(594)
Effect of Exchange Rate on Cash and Cash Equivalents				448				331	726	15	936	(50)	948	(607)	(1,805)
Cash and Cash Equivalents, Period Increase (Decrease)				(1,004)				(9,826)	(7,387)	851	(3,242)	(9,968)	(362)	169	8,177
Cash and Cash Equivalents, at Carrying Value	$ 30,562	$ 27,682	$ 23,537	$ 29,920	$ 30,924	$ 20,787	$ 31,606	$ 20,929	$ 23,537	$ 31,606	$ 27,682	$ 20,787	$ 30,562	$ 30,924	$ 30,755	$ 22,578

XML

Restatement and Revision of Prior Period Quarterly Financial Statements - Restated and Revised Consolidated Statements of Income Amounts (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue	$ 305,367	$ 288,523	$ 280,066	$ 264,405	$ 275,727	$ 276,002	$ 272,212	$ 270,461	$ 544,471	$ 542,673	$ 832,994	$ 818,675	$ 1,138,361	$ 1,094,402	$ 1,028,892
Cost of Goods Sold		216,602	210,020	199,701		209,421	206,232	208,935	409,721	415,167	626,323	624,588	862,903	831,838	788,862
Gross profit	68,787	71,921	70,046	64,704	68,477	66,581	65,980	61,526	134,750	127,506	206,671	194,087	275,458	262,564	240,030
Selling, general and administrative		57,186	55,054	53,615		52,466	51,622	51,477	108,669	103,099	165,855	155,565	227,253	209,524	197,247
Income (loss) from operations		11,585	9,926	9,225		7,796	1,739	198	19,151	1,937	30,736	9,732	34,138	19,022	(13,213)
Income (loss) before taxes		10,844	7,736	8,032		6,517	1,069	(1,026)	15,768	42	26,612	6,559	27,718	14,783	(20,891)
Income tax expense (benefit)		3,728	3,362	2,354		2,292	2,974	2,110	5,716	5,084	9,444	7,376	11,288	10,834	11,498
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Basic earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.11	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.19	$ (0.09)	$ 0.32	$ (0.02)	$ 0.31	$ 0.07	$ (0.61)
Diluted earnings (loss) per share (in USD per share)	$ (0.01)	$ 0.13	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.06)	$ 0.18	$ (0.09)	$ 0.31	$ (0.02)	$ 0.30	$ 0.07	$ (0.61)
Comprehensive income (loss)		$ 9,284	$ 8,253	$ 7,657		$ 4,024	$ (3,295)	$ (3,411)	$ 15,911	$ (6,708)	$ 25,196	$ (2,683)	$ 18,150	$ (3,198)	$ (40,640)
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue	$ 300,950	288,386	279,530	267,390	$ 270,418	279,993	269,220	271,073	546,920	540,292	835,306	820,286	1,136,256	1,090,704	1,029,353
Cost of Goods Sold		215,867	209,303	203,113		212,212	204,126	209,127	412,416	413,253	628,282	625,465	857,921	827,156	789,159
Gross profit	71,311	72,519	70,227	64,277	68,727	67,781	65,093	61,946	134,504	127,039	207,024	194,821	278,335	263,548	240,194
Selling, general and administrative		57,134	55,086	53,427		52,601	51,418	51,492	108,513	102,910	165,647	155,511	225,738	209,967	197,291
Income (loss) from operations		12,236	10,075	8,986		8,860	1,056	603	19,061	1,659	31,297	10,520	38,530	19,563	(13,093)
Income (loss) before taxes		11,495	7,884	7,793		7,581	386	(621)	15,678	(235)	27,173	7,347	32,110	15,325	(20,771)
Income tax expense (benefit)		3,967	3,391	2,337		3,240	2,710	2,072	5,727	4,782	9,694	8,023	13,131	10,955	12,292
Net income (loss)	$ 1,500	$ 7,528	$ 4,493	$ 5,456	$ 5,047	$ 4,341	$ (2,324)	$ (2,693)	$ 9,951	$ (5,017)	$ 17,479	$ (676)	$ 18,979	$ 4,370	$ (33,063)
Basic earnings (loss) per share (in USD per share)	$ 0.03	$ 0.14	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.05)	$ 0.19	$ (0.09)	$ 0.32	$ (0.01)	$ 0.35	$ 0.08	$ (0.63)
Diluted earnings (loss) per share (in USD per share)	$ 0.03	$ 0.14	$ 0.08	$ 0.10	$ 0.09	$ 0.08	$ (0.04)	$ (0.05)	$ 0.18	$ (0.09)	$ 0.32	$ (0.01)	$ 0.35	$ 0.08	$ (0.63)
Comprehensive income (loss)		$ 9,696	$ 8,373	$ 7,435		$ 4,140	$ (3,714)	$ (3,163)	$ 15,810	$ (6,877)	$ 25,506	$ (2,201)	$ 20,697	$ (2,436)	$ (41,655)
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Revenue	$ 4,417	137	536	(2,985)	$ 5,309	(3,991)	2,992	(612)	(2,449)	2,381	(2,312)	(1,611)	2,105	3,698	(461)
Cost of Goods Sold		735	717	(3,412)		(2,791)	2,106	(192)	(2,695)	1,914	(1,959)	(877)	4,982	4,682	(297)
Gross profit	(2,524)	(598)	(181)	427	(250)	(1,200)	886	(420)	246	467	(353)	(734)	(2,877)	(984)	(164)
Selling, general and administrative		52	(32)	188		(135)	203	(15)	156	189	208	54	1,515	(443)	(44)
Income (loss) from operations		(649)	(149)	239		(1,064)	683	(405)	90	278	(561)	(788)	(4,392)	(541)	(120)
Income (loss) before taxes		(650)	(149)	239		(1,064)	683	(405)	90	277	(562)	(788)	(4,392)	(542)	(120)
Income tax expense (benefit)		(239)	(29)	17		(948)	264	38	(11)	302	(250)	(647)	(1,843)	(121)	(794)
Net income (loss)	$ (2,238)	$ (411)	$ (120)	$ 222	$ (282)	$ (116)	$ 419	$ (443)	$ 101	$ (26)	$ (311)	$ (141)	$ (2,549)	$ (421)	$ 674
Basic earnings (loss) per share (in USD per share)	$ (0.04)	$ (0.01)	$ 0.00	$ 0.01	$ 0.00	$ 0.00	$ 0.00	$ (0.01)	$ 0.00	$ 0.00	$ 0.00	$ (0.01)	$ (0.04)	$ (0.01)	$ 0.02
Diluted earnings (loss) per share (in USD per share)	$ (0.04)	$ (0.01)	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ (0.01)	$ 0.00	$ 0.00	$ (0.01)	$ (0.01)	$ (0.05)	$ (0.01)	$ 0.02
Comprehensive income (loss)		$ (411)	$ (120)	$ 222		$ (116)	$ 419	$ (248)	$ 101	$ 169	$ (311)	$ (482)	$ (2,547)	$ (762)	$ 1,015

XML

Restatement and Revision of Prior Period Quarterly Financial Statements - Restated and Revised Consolidated Balance Sheet Amounts (Unaudited) (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable	$ 205,386,000	$ 200,799,000	$ 206,242,000	$ 184,713,000	$ 182,464,000	$ 185,659,000	$ 188,247,000	$ 196,251,000
Unbilled revenue	50,016,000	48,645,000	34,264,000	33,771,000	31,516,000	37,982,000	29,202,000	32,457,000
Inventories	40,694,000	54,174,000	34,558,000	36,674,000	36,448,000	52,830,000	43,528,000	42,350,000
Prepaid expenses	18,565,000	22,018,000	23,588,000	23,912,000	18,459,000	11,551,000	11,712,000	12,524,000
Other current assets	37,865,000	31,529,000	20,475,000	20,302,000	24,597,000	31,302,000	17,738,000	16,699,000
Total current assets	383,088,000	384,847,000	342,664,000	329,292,000	324,408,000	340,111,000	322,033,000	321,210,000
Other non-current assets	1,636,000	1,592,000	1,547,000	1,633,000	1,654,000	1,426,000	1,415,000	1,469,000
Total intangibles and other assets	229,836,000	238,473,000	237,926,000	236,794,000	236,923,000	241,003,000	242,025,000	244,903,000
Total assets	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000
Accounts payable	141,164,000	130,406,000	126,382,000	114,616,000	123,012,000	129,869,000	139,914,000	129,894,000
Accrued expenses	34,391,000	32,889,000	27,409,000	32,422,000	29,755,000	20,788,000	16,096,000	23,939,000
Other current liabilities	24,078,000	30,416,000	25,210,000	24,359,000	22,576,000	25,760,000	24,200,000	24,401,000
Deferred revenue	17,620,000	15,709,000	15,392,000	16,885,000	16,402,000	13,409,000	15,180,000	14,589,000
Total current liabilities	217,253,000	209,420,000	212,235,000	206,540,000	211,028,000	210,829,000	207,779,000	207,558,000
Deferred income taxes	12,043,000	9,839,000	9,876,000	9,818,000	10,766,000	10,622,000	11,060,905	9,652,000
Other long-term liabilities	7,399,000	2,595,000	2,625,000	2,697,000	2,564,000	2,591,000	2,995,000	3,129,000
Total liabilities	365,093,000	371,038,000	343,394,000	332,746,000	331,826,000	357,776,000	348,100,000	348,142,000
Accumulated other comprehensive loss	(19,229,000)	(12,922,000)	(15,090,000)	(18,970,000)	(20,949,000)	(15,668,000)	(15,467,000)	(14,077,000)
Retained earnings	124,442,000	124,369,000	117,504,000	113,147,000	108,082,000	103,918,000	99,693,000	101,734,000
Total stockholders' equity	284,545,000	289,494,000	273,226,000	267,340,000	262,161,000	255,617,000	249,048,000	251,179,000	$ 252,432,000	$ 290,260,000
Total liabilities and stockholders' equity	649,638,000	660,532,000	616,620,000	600,086,000	593,987,000	613,393,000	597,148,000	599,321,000
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable	206,712,000	203,306,000	208,382,000	187,028,000	182,874,000	190,438,000	193,297,000	200,629,000
Unbilled revenue	49,389,000	50,130,000	36,515,000	35,712,000	32,723,000	40,505,000	27,857,000	34,548,000
Inventories	34,807,000	48,744,000	28,192,000	30,338,000	31,638,000	45,377,000	35,901,000	34,715,000
Prepaid expenses	19,638,000				18,772,000	11,984,000	12,145,000	12,957,000
Other current assets	32,694,000	31,850,000	20,949,000	20,598,000	24,769,000	30,528,000	17,647,000	16,708,000
Total current assets	373,802,000	383,730,000	341,163,000	327,508,000	321,700,000	339,619,000	318,453,000	320,485,000
Other non-current assets	1,382,000	1,312,000	1,267,000	1,353,000	1,374,000
Total intangibles and other assets	229,503,000	238,193,000	237,646,000	236,514,000	236,642,000
Total assets	640,019,000	659,135,000	614,839,000	598,022,000	590,999,000	612,901,000	593,567,000	598,596,000
Accounts payable	134,609,000	129,600,000	125,593,000	114,399,000	121,289,000	129,980,000	136,260,000	130,048,000
Accrued expenses	33,694,000	32,994,000	27,567,000	32,547,000	30,068,000	21,037,000	17,818,000	24,257,000
Other current liabilities	20,956,000	31,589,000	26,163,000	25,231,000	22,971,000
Deferred revenue	13,685,000	11,707,000	11,585,000	12,405,000	12,078,000	9,755,000	11,793,000	10,975,000
Total current liabilities	202,943,000	205,890,000	208,750,000	202,840,000	205,688,000	207,535,000	202,460,000	204,416,000
Deferred income taxes	12,348,000	9,834,000	9,852,000	9,848,000	11,291,000	11,594,000	11,620,000	10,476,000
Other long-term liabilities	6,771,000	1,958,000	1,988,000	2,060,000	1,926,000	2,235,000	2,639,000	2,772,000
Total liabilities	350,461,000	366,866,000	339,248,000	328,439,000	326,373,000	355,098,000	342,984,000	345,466,000
Accumulated other comprehensive loss	(19,079,000)	(12,772,000)	(14,940,000)	(18,820,000)	(20,799,000)	(15,518,000)	(15,853,000)	(14,463,000)
Retained earnings	129,305,000	126,994,000	119,719,000	115,240,000	110,397,000	105,954,000	101,614,000	104,071,000
Total stockholders' equity	289,559,000	292,269,000	275,591,000	269,583,000	264,626,000	257,803,000	250,583,000	253,130,000
Total liabilities and stockholders' equity	640,019,000	659,135,000	614,839,000	598,022,000	590,999,000	612,901,000	593,567,000	598,596,000
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accounts receivable	(1,326,000)	(2,507,000)	(2,140,000)	(2,315,000)	(410,000)	(4,779,000)	(5,050,000)	(4,378,000)
Unbilled revenue	627,000	(1,485,000)	(2,251,000)	(1,941,000)	(1,207,000)	(2,523,000)	1,345,000	(2,091,000)
Inventories	5,887,000	5,430,000	6,366,000	6,336,000	4,810,000	7,453,000	7,627,000	7,635,000
Prepaid expenses	(1,073,000)				(313,000)	(433,000)	(433,000)	(433,000)
Other current assets	5,171,000	(321,000)	(474,000)	(296,000)	(172,000)	774,000	92,000	(8,000)
Total current assets	9,286,000	1,117,000	1,501,000	1,784,000	2,708,000	492,000	3,580,000	725,000
Other non-current assets	254,000	280,000	280,000	280,000	280,000
Total intangibles and other assets	333,000	280,000	280,000	280,000	280,000
Total assets	9,619,000	1,397,000	1,781,000	2,064,000	2,988,000	492,000	3,582,000	725,000
Accounts payable	6,555,000	806,000	789,000	217,000	1,723,000	(111,000)	3,654,000	(154,000)
Accrued expenses	697,000	(105,000)	(158,000)	(125,000)	(313,000)	(249,000)	(1,722,000)	(318,000)
Other current liabilities	3,122,000	(1,173,000)	(953,000)	(872,000)	(395,000)
Deferred revenue	3,935,000	4,002,000	3,807,000	4,480,000	4,324,000	3,654,000	3,387,000	3,614,000
Total current liabilities	14,310,000	3,530,000	3,485,000	3,700,000	5,340,000	3,294,000	5,319,000	3,142,000
Deferred income taxes	(305,000)	5,000	24,000	(30,000)	(525,000)	(972,000)	(559,000)	(824,000)
Other long-term liabilities	628,000	637,000	637,000	637,000	638,000	356,000	356,000	358,000
Total liabilities	14,632,000	4,172,000	4,146,000	4,307,000	5,453,000	2,678,000	5,116,000	2,676,000
Accumulated other comprehensive loss	(150,000)	(150,000)	(150,000)	(150,000)	(150,000)	(150,000)	386,000	386,000
Retained earnings	(4,863,000)	(2,625,000)	(2,215,000)	(2,093,000)	(2,315,000)	(2,036,000)	(1,921,000)	(2,337,000)
Total stockholders' equity	(5,014,000)	(2,775,000)	(2,365,000)	(2,243,000)	(2,465,000)	(2,186,000)	(1,535,000)	(1,951,000)
Total liabilities and stockholders' equity	$ 9,619,000	$ 1,397,000	$ 1,781,000	$ 2,064,000	$ 2,988,000	$ 492,000	$ 3,581,000	$ 725,000

XML

Restatement and Revision of Prior Period Quarterly Financial Statements - Restated and Reviewed Consolidated Statement of Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended								6 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (738)	$ 7,116	$ 4,374	$ 5,678	$ 4,765	$ 4,225	$ (1,905)	$ (3,136)	$ 10,052	$ (5,043)	$ 17,168	$ (817)	$ 16,430	$ 3,949	$ (32,389)
Deferred income taxes				478				(546)	624	557	448	372	4,072	4,226	5,879
Accounts receivable and unbilled revenue				4,680				15,863	26,620	4,738	35,732	11,573	41,877	2,651	10,580
Inventories				226				(453)	(1,890)	725	17,726	10,027	4,245	(6,355)	9,676
Prepaid expenses and other assets				1,167				(5,968)	971	(5,742)	10,567	7,622	13,547	8,206	4,140
Accounts payable				(8,396)				(31,526)	3,370	(21,506)	7,395	(31,551)	18,152	(38,408)	25,102
Accrued expenses and other liabilities				4,923				11,627	(69)	3,110	10,830	7,543	15,520	12,933	3,582
Net cash provided by operating activities				120				(24,566)	(1,687)	(848)	(12,383)	(23,632)	16,056	10,525	43,402
Repurchases of common stock				4,342				0	10,041	0	10,041	0	10,885	0	4,897
Proceeds from (Payments for) Other Financing Activities				1,470				18,396	598	9,129	18,479	24,216	(1,156)	(866)	(594)
As Reported
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	1,500	7,528	4,493	5,456	5,047	4,341	(2,324)	(2,693)	9,951	(5,017)	17,479	(676)	18,979	4,370	(33,063)
Deferred income taxes				(16)				(389)	76	450	(82)	677	3,744	4,084	6,947
Accounts receivable and unbilled revenue				7,318				16,256	29,395	2,366	38,108	12,798	40,959	(1,809)	10,361
Inventories				(1,300)				1,388	(3,446)	2,573	17,106	12,050	3,169	(1,690)	8,188
Prepaid expenses and other assets				979				(16,382)	957	(16,255)	10,401	(3,574)	8,989	(2,442)	6,138
Accounts payable				(6,890)				(40,196)	4,304	(33,984)	8,312	(40,264)	13,320	(48,955)	26,199
Accrued expenses and other liabilities				5,057				11,518	851	4,632	11,722	7,861	11,670	12,759	2,118
Net cash provided by operating activities				120				(24,566)	(1,687)	(848)	(12,383)	(23,632)	16,147	10,525	43,402
Repurchases of common stock													10,976
Adjustments
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net income (loss)	$ (2,238)	$ (411)	$ (120)	222	$ (282)	$ (116)	$ 419	(443)	101	(26)	(311)	(141)	(2,549)	(421)	674
Deferred income taxes				494				(157)	548	107	530	(305)	328	142	(1,068)
Accounts receivable and unbilled revenue				(2,638)				(393)	(2,775)	2,372	(2,376)	(1,225)	918	4,460	(219)
Inventories				1,526				(1,841)	1,556	(1,848)	620	(2,023)	1,076	(4,665)	(1,488)
Prepaid expenses and other assets				188				10,414	14	10,513	166	11,196	4,558	10,648	1,998
Accounts payable				(1,506)				8,670	(934)	12,478	(917)	8,713	4,832	10,547	(1,097)
Accrued expenses and other liabilities				(134)				109	(920)	(1,522)	(891)	(318)	3,850	174	1,464
Net cash provided by operating activities				$ 0				$ 0	$ 0	$ 0	$ 0	$ 0	(91)	$ 0	$ 0
Repurchases of common stock													$ (91)

XML

SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	$ 2,622	$ 1,231	$ 2,622	$ 1,231	$ 2,622	$ 1,231	$ 2,622	$ 1,231	$ 2,685
Charged to Expense	$ 175	$ 656	$ 82	$ 0	$ 268	$ 1,433	454	2,171	1,685
(Uncollectible Accounts Written Off, Net of Recoveries)							(457)	780	(3,139)
Balance at End of Period							$ 3,534	$ 2,622	$ 1,231