ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 13-4315148 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
7800 N. Dallas Parkway, Suite 500, Plano, Texas | 75024 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ | |||
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | x |
July 31, 2017 | January 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 24,595 | $ | 44,563 | |||
Accounts receivable, net of allowance for doubtful accounts of $5,511 and $5,152, respectively | 61,193 | 52,478 | |||||
Inventories, net | 3,970 | 3,721 | |||||
Prepaid expenses and other assets | 3,461 | 4,145 | |||||
Total current assets | 93,219 | 104,907 | |||||
Property and equipment, net | 320,495 | 320,707 | |||||
Goodwill | 54,836 | 49,918 | |||||
Other intangible assets, net | 347,407 | 354,418 | |||||
Other assets | 2,151 | 590 | |||||
Total assets | $ | 818,108 | $ | 830,540 | |||
Liabilities and shareholder’s equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 15,926 | $ | 17,697 | |||
Accrued expenses | 20,318 | 21,855 | |||||
Current portion of long-term debt (net of deferred financing costs of $3,162 and $3,080, respectively) | 1,000 | 1,082 | |||||
Total current liabilities | 37,244 | 40,634 | |||||
Long-term debt, net of current portion (net of deferred financing costs of $3,414 and $4,183, respectively) | 633,083 | 634,395 | |||||
Deferred tax liabilities, net | 102,444 | 110,114 | |||||
Share-based compensation liability | 35 | 66 | |||||
Other long-term liabilities | 2,770 | 2,936 | |||||
Total liabilities | 775,576 | 788,145 | |||||
Commitments and contingencies | |||||||
Shareholder’s equity: | |||||||
Common stock, $0.01 par value; 100,000 shares authorized; 100 shares issued and outstanding on July 31, 2017 and January 31, 2017 | — | — | |||||
Additional paid-in capital | 393,399 | 393,094 | |||||
Accumulated other comprehensive loss | (28,545 | ) | (41,537 | ) | |||
Accumulated deficit | (322,322 | ) | (309,162 | ) | |||
Total shareholder’s equity | 42,532 | 42,395 | |||||
Total liabilities and shareholder’s equity | $ | 818,108 | $ | 830,540 |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue: | |||||||||||||||
Rental revenue | $ | 54,654 | $ | 51,444 | $ | 105,467 | $ | 103,765 | |||||||
Sales revenue | 5,230 | 3,762 | 9,928 | 8,696 | |||||||||||
Service revenue | 8,317 | 7,994 | 15,945 | 15,771 | |||||||||||
Total revenue | 68,201 | 63,200 | 131,340 | 128,232 | |||||||||||
Operating expenses: | |||||||||||||||
Employee related expenses | 24,033 | 24,267 | 48,973 | 48,957 | |||||||||||
Rental expenses | 8,812 | 6,840 | 17,569 | 14,350 | |||||||||||
Repair and maintenance | 3,441 | 2,874 | 6,609 | 5,187 | |||||||||||
Cost of goods sold | 3,416 | 2,300 | 6,559 | 5,362 | |||||||||||
Facility expenses | 6,851 | 6,649 | 13,683 | 13,605 | |||||||||||
Professional fees | 689 | 1,126 | 2,048 | 2,218 | |||||||||||
Other operating expenses | 3,568 | 3,398 | 7,588 | 6,982 | |||||||||||
Depreciation and amortization | 14,748 | 15,075 | 29,469 | 30,184 | |||||||||||
Gain on sale of equipment | (606 | ) | (976 | ) | (1,726 | ) | (1,634 | ) | |||||||
Impairment of goodwill and other intangible assets | 1,000 | — | 1,000 | 84,046 | |||||||||||
Impairment of long-lived assets | 96 | 439 | 296 | 439 | |||||||||||
Total operating expenses | 66,048 | 61,992 | 132,068 | 209,696 | |||||||||||
Income (loss) from operations | 2,153 | 1,208 | (728 | ) | (81,464 | ) | |||||||||
Other expenses: | |||||||||||||||
Interest expense, net | 10,210 | 10,626 | 20,192 | 21,149 | |||||||||||
Foreign currency exchange (gain) loss, net | (303 | ) | 731 | (143 | ) | 238 | |||||||||
Other income, net | (10 | ) | (12 | ) | (10 | ) | (12 | ) | |||||||
Total other expenses, net | 9,897 | 11,345 | 20,039 | 21,375 | |||||||||||
Loss before income tax benefit | (7,744 | ) | (10,137 | ) | (20,767 | ) | (102,839 | ) | |||||||
Income tax benefit | (2,795 | ) | (2,252 | ) | (7,607 | ) | (23,141 | ) | |||||||
Net loss | $ | (4,949 | ) | $ | (7,885 | ) | $ | (13,160 | ) | $ | (79,698 | ) |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss | $ | (4,949 | ) | $ | (7,885 | ) | $ | (13,160 | ) | $ | (79,698 | ) | |||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | — | 292 | — | 586 | |||||||||||
Foreign currency translation adjustments | 10,902 | (3,216 | ) | 12,992 | 3,220 | ||||||||||
Other comprehensive income (loss) | 10,902 | (2,924 | ) | 12,992 | 3,806 | ||||||||||
Total comprehensive income (loss) | $ | 5,953 | $ | (10,809 | ) | $ | (168 | ) | $ | (75,892 | ) |
Six Months Ended July 31, | |||||||
2017 | 2016 | ||||||
Operating activities | |||||||
Net loss | $ | (13,160 | ) | $ | (79,698 | ) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||
Provision for doubtful accounts | 486 | 435 | |||||
Provision for excess and obsolete inventory, net | (6 | ) | — | ||||
Share-based compensation | 305 | (39 | ) | ||||
Gain on sale of equipment | (1,726 | ) | (1,634 | ) | |||
Depreciation and amortization | 29,469 | 30,184 | |||||
Amortization of deferred financing costs | 1,509 | 1,432 | |||||
Deferred income taxes | (8,308 | ) | (24,326 | ) | |||
Amortization of above-market lease | (76 | ) | (76 | ) | |||
Impairment of goodwill and other intangible assets | 1,000 | 84,046 | |||||
Impairment of long-lived assets | 296 | 439 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (8,167 | ) | 4,571 | ||||
Inventories | (235 | ) | 4,070 | ||||
Prepaid expenses and other assets | 681 | (384 | ) | ||||
Accounts payable and other liabilities | (4,739 | ) | (6,264 | ) | |||
Net cash (used in) provided by operating activities | (2,671 | ) | 12,756 | ||||
Investing activities | |||||||
Purchases of property and equipment | (16,874 | ) | (24,679 | ) | |||
Proceeds from sale of equipment | 503 | 2,514 | |||||
Net cash used in investing activities | (16,371 | ) | (22,165 | ) | |||
Financing activities | |||||||
Repayment of long-term debt | (2,081 | ) | (2,081 | ) | |||
Return of capital to BakerCorp International Holdings, Inc. | — | (8 | ) | ||||
Net cash used in financing activities | (2,081 | ) | (2,089 | ) | |||
Effect of foreign currency translation on cash | 1,155 | 381 | |||||
Net decrease in cash and cash equivalents | (19,968 | ) | (11,117 | ) | |||
Cash and cash equivalents, beginning of period | 44,563 | 44,754 | |||||
Cash and cash equivalents, end of period | $ | 24,595 | $ | 33,637 | |||
Supplemental disclosure of cash flow information | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 18,653 | $ | 19,731 | |||
Income taxes | $ | 1,887 | $ | 1,191 | |||
Non-cash financing and investing activities: | |||||||
Return of capital to BakerCorp International Holdings, Inc. related to a settlement of options for shares of common stock in BakerCorp International Holdings Inc. | $ | — | $ | 8 |
(In thousands) | ||||
Balance as of April 30, 2017 | $ | (39,447 | ) | |
Other comprehensive income before reclassifications | 10,902 | |||
Net other comprehensive income | 10,902 | |||
Balance as of July 31, 2017 | $ | (28,545 | ) |
(In thousands) | Unrealized (Loss) Gain on Interest Rate Swap Agreements (1) | Change in Foreign Currency Translation Adjustments | Total | ||||||||
Balance as of April 30, 2016 | $ | (292 | ) | $ | (32,645 | ) | $ | (32,937 | ) | ||
Other comprehensive income (loss) before reclassifications | 292 | (3,216 | ) | (2,924 | ) | ||||||
Net other comprehensive income (loss) | 292 | (3,216 | ) | (2,924 | ) | ||||||
Balance as of July 31, 2016 | $ | — | $ | (35,861 | ) | $ | (35,861 | ) |
(1) | Unrealized income on interest rate swap agreements is net of tax expense of $184 for the three months ended July 31, 2016. |
(In thousands) | ||||
Balance as of January 31, 2017 | $ | (41,537 | ) | |
Other comprehensive income before reclassifications | 12,992 | |||
Net other comprehensive income | 12,992 | |||
Balance as of July 31, 2017 | $ | (28,545 | ) |
(In thousands) | Unrealized (Loss) Gain on Interest Rate Swap Agreements (1) | Change in Foreign Currency Translation Adjustments | Total | ||||||||
Balance as of January 31, 2016 | $ | (586 | ) | $ | (39,081 | ) | $ | (39,667 | ) | ||
Other comprehensive income before reclassifications | 586 | 3,220 | 3,806 | ||||||||
Net other comprehensive income | 586 | 3,220 | 3,806 | ||||||||
Balance as of July 31, 2016 | $ | — | $ | (35,861 | ) | $ | (35,861 | ) |
(In thousands) | July 31, 2017 | January 31, 2017 | |||||
Components | $ | 1,279 | $ | 1,237 | |||
Work-in-process | 189 | 627 | |||||
Finished goods | 3,484 | 2,845 | |||||
Less: inventory reserve | (982 | ) | (988 | ) | |||
Inventories, net | $ | 3,970 | $ | 3,721 |
(In thousands) | Cost | Accumulated Depreciation | Net Carrying Amount | ||||||||
Assets held for rent: | |||||||||||
Spill protection berms | $ | 3,514 | $ | (2,530 | ) | $ | 984 | ||||
Boxes | 31,857 | (15,581 | ) | 16,276 | |||||||
Filtration | 15,013 | (7,824 | ) | 7,189 | |||||||
Generators and light towers | 513 | (245 | ) | 268 | |||||||
Pipes, hoses and fittings | 8,467 | (5,946 | ) | 2,521 | |||||||
Non-steel containment | 11,766 | (5,302 | ) | 6,464 | |||||||
Pumps | 62,828 | (38,903 | ) | 23,925 | |||||||
Shoring | 5,682 | (3,895 | ) | 1,787 | |||||||
Steel containment | 329,364 | (94,939 | ) | 234,425 | |||||||
Tank trailers | 1,870 | (1,729 | ) | 141 | |||||||
Construction in progress | 3,626 | — | 3,626 | ||||||||
Total assets held for rent | 474,500 | (176,894 | ) | 297,606 | |||||||
Assets held for use: | |||||||||||
Leasehold improvements | 4,415 | (2,800 | ) | 1,615 | |||||||
Machinery and equipment | 45,983 | (32,042 | ) | 13,941 | |||||||
Office furniture and equipment | 6,114 | (4,455 | ) | 1,659 | |||||||
Software | 14,499 | (9,605 | ) | 4,894 | |||||||
Construction in progress | 780 | — | 780 | ||||||||
Total assets held for use | 71,791 | (48,902 | ) | 22,889 | |||||||
Total | $ | 546,291 | $ | (225,796 | ) | $ | 320,495 |
(In thousands) | Cost | Accumulated Depreciation | Net Carrying Amount | ||||||||
Assets held for rent: | |||||||||||
Spill protection berms | $ | 3,487 | $ | (2,497 | ) | $ | 990 | ||||
Boxes | 31,128 | (14,357 | ) | 16,771 | |||||||
Filtration | 14,303 | (6,820 | ) | 7,483 | |||||||
Generators and light towers | 518 | (235 | ) | 283 | |||||||
Pipes, hoses and fittings | 11,196 | (8,479 | ) | 2,717 | |||||||
Non-steel containment | 10,309 | (5,031 | ) | 5,278 | |||||||
Pumps | 58,021 | (35,761 | ) | 22,260 | |||||||
Shoring | 4,681 | (3,444 | ) | 1,237 | |||||||
Steel containment | 324,267 | (88,996 | ) | 235,271 | |||||||
Tank trailers | 1,881 | (1,685 | ) | 196 | |||||||
Construction in progress | 2,081 | — | 2,081 | ||||||||
Total assets held for rent | 461,872 | (167,305 | ) | 294,567 | |||||||
Assets held for use: | |||||||||||
Leasehold improvements | 3,949 | (2,572 | ) | 1,377 | |||||||
Machinery and equipment | 44,379 | (29,673 | ) | 14,706 | |||||||
Office furniture and equipment | 5,937 | (4,071 | ) | 1,866 | |||||||
Software | 13,889 | (8,324 | ) | 5,565 | |||||||
Construction in progress | 2,626 | — | 2,626 | ||||||||
Total assets held for use | 70,780 | (44,640 | ) | 26,140 | |||||||
Total | $ | 532,652 | $ | (211,945 | ) | $ | 320,707 |
(In thousands) | Total | ||
Balance as of January 31, 2017 | $ | 49,918 | |
Foreign currency translation | 4,918 | ||
Balance as of July 31, 2017 | $ | 54,836 |
• | Long-term EBITDA margin range of 25.8% to 30.5%, reflecting our historical and forecasted profit margins; |
• | Long-term revenue growth rate range of 3.0% to 8.0% based on long-term nominal growth rate potential; |
• | A discount rate of 10% based on our weighted average cost of capital; |
July 31, 2017 | January 31, 2017 | |||||||||||||||||||||||
(In thousands) | Gross (1) | Accumulated Amortization | Net | Gross (1) | Accumulated Amortization | Net | ||||||||||||||||||
Carrying amount: | ||||||||||||||||||||||||
Customer relationships (25 years) | $ | 402,157 | $ | (99,198 | ) | $ | 302,959 | $ | 400,455 | $ | (90,770 | ) | $ | 309,685 | ||||||||||
Customer backlog (2 years) | 200 | (200 | ) | — | 200 | (200 | ) | — | ||||||||||||||||
Developed technology (11 years) | 1,657 | (550 | ) | 1,107 | 1,634 | (467 | ) | 1,167 | ||||||||||||||||
Trade name (Indefinite)(1) | 43,341 | — | 43,341 | 43,566 | — | 43,566 | ||||||||||||||||||
Total carrying amount | $ | 447,355 | $ | (99,948 | ) | $ | 347,407 | $ | 445,855 | $ | (91,437 | ) | $ | 354,418 |
• | Royalty rate of 1.5% based on market observed royalty rates; and |
• | A discount rate of 12.0% based on the required rate of return for the trade name asset. |
(In thousands) | |||
Remainder of the fiscal year ending January 31, 2018 | $ | 8,118 | |
2019 | 16,237 | ||
2020 | 16,237 | ||
2021 | 16,237 | ||
2022 | 16,237 | ||
Thereafter | 231,000 | ||
Total | $ | 304,066 |
(In thousands) | July 31, 2017 | January 31, 2017 | |||||
Accrued compensation | $ | 9,444 | $ | 11,488 | |||
Accrued insurance | 881 | 793 | |||||
Accrued interest | 3,296 | 3,257 | |||||
Accrued professional fees | 262 | 459 | |||||
Accrued taxes | 4,847 | 3,852 | |||||
Capital lease - current | 680 | 545 | |||||
Other accrued expenses | 908 | 1,461 | |||||
Total accrued expenses | $ | 20,318 | $ | 21,855 |
(In thousands) | July 31, 2017 | January 31, 2017 | |||||
Senior term loan (LIBOR margin of 3.0%, and interest rate of 4.25%) | $ | 400,659 | $ | 402,740 | |||
Senior unsecured notes | 240,000 | 240,000 | |||||
Total debt | 640,659 | 642,740 | |||||
Less: deferred financing costs | (6,576 | ) | (7,263 | ) | |||
Total debt less deferred financing costs | 634,083 | 635,477 | |||||
Less: current portion (net of current portion of deferred financing costs of $3,162 and $3,080, respectively) | (1,000 | ) | (1,082 | ) | |||
Long-term debt, net of current portion (net of long-term portion of deferred financing costs of $3,414 and $4,183, respectively) | $ | 633,083 | $ | 634,395 |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Credit Facility interest and fees(1) | $ | 4,777 | $ | 4,867 | $ | 9,636 | $ | 9,637 | |||||||
Notes interest and fees (2) | 5,304 | 5,274 | 10,600 | 10,541 | |||||||||||
Total interest and fees | $ | 10,081 | $ | 10,141 | $ | 20,236 | $ | 20,178 |
(In thousands) | |||
Remainder of the fiscal year ending January 31, 2018 | $ | 2,082 | |
2019 | 4,163 | ||
2020 | 634,414 | ||
Total | $ | 640,659 |
Number of Options | Weighted Average Exercise Price | Aggregate Intrinsic Value (in thousands)(1) | Weighted Average Term Remaining (in years) | Weighted Average Grant Date Fair Value | ||||||||||||
Outstanding, January 31, 2017 | 766,348 | $ | 83.47 | $ | — | 6.5 | ||||||||||
Granted | — | $ | — | $ | — | |||||||||||
Exercised | — | $ | — | $ | — | |||||||||||
Forfeited/canceled/expired | (33,328 | ) | $ | 39.12 | ||||||||||||
Outstanding, July 31, 2017 | 733,020 | $ | 83.92 | $ | — | 6.1 | ||||||||||
Vested and expected to vest, July 31, 2017 | 78,344 | $ | 74.90 | $ | — | 3.5 | ||||||||||
Exercisable, July 31, 2017 | 78,344 | $ | 74.90 | $ | — | 2.1 |
(1) | Aggregate intrinsic value in the table above represents the total pre-tax value that option holders would have received had all stock option holders exercised their options as of July 31, 2017. The aggregate intrinsic value is the difference between the estimated fair market value of the BCI Holdings common stock at the end of the period and the stock option exercise price, multiplied by the number of in-the-money options. This amount will change based on the fair market value of the BCI Holdings common stock. |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Non-cash share-based compensation expense (income) | $ | 167 | $ | 233 | $ | 305 | $ | (39 | ) |
Six Months Ended July 31, | |||||
2017 | 2016 | ||||
Expected volatility | 56 | % | 56 | % | |
Expected dividends | — | % | — | % | |
Expected term | 7.2 years | 7.2 years | |||
Risk-free interest rate | 1.5 | % | 1.5 | % |
Six Months Ended July 31, | |||||
2017 | 2016 | ||||
Expected volatility | 60 | % | 60 | % | |
Expected dividends | — | % | — | % | |
Expected term | 0.8 years | 1.1 years | |||
Risk-free interest rate | 0.5 | % | 0.5 | % |
• | the North American segment consisting of branches located in the United States and Canada that provide equipment and services suitable across these North American countries. |
• | the European segment consisting of branches located in France, Germany, the United Kingdom and the Netherlands that provide equipment and services to customers in a number of European countries. |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | ||||||||||||||||
North America | 57,273 | 52,737 | 111,451 | 109,211 | ||||||||||||
Europe | 10,928 | 10,463 | 19,889 | 19,021 | ||||||||||||
Total revenue | $ | 68,201 | $ | 63,200 | $ | 131,340 | $ | 128,232 | ||||||||
Depreciation and amortization | ||||||||||||||||
North America | $ | 13,284 | $ | 13,852 | $ | 26,674 | $ | 27,761 | ||||||||
Europe | 1,464 | 1,223 | 2,795 | 2,423 | ||||||||||||
Total depreciation and amortization | $ | 14,748 | $ | 15,075 | $ | 29,469 | $ | 30,184 | ||||||||
Interest expense (income), net | ||||||||||||||||
North America | $ | 10,210 | $ | 10,627 | $ | 20,203 | $ | 21,143 | ||||||||
Europe | — | (1 | ) | (11 | ) | 6 | ||||||||||
Total interest expense, net | $ | 10,210 | $ | 10,626 | $ | 20,192 | $ | 21,149 | ||||||||
Income tax (benefit) expense | ||||||||||||||||
North America | $ | (3,484 | ) | $ | (3,072 | ) | $ | (8,730 | ) | $ | (24,417 | ) | ||||
Europe | 689 | 820 | 1,123 | 1,276 | ||||||||||||
Total income tax benefit | $ | (2,795 | ) | $ | (2,252 | ) | $ | (7,607 | ) | $ | (23,141 | ) | ||||
Net (loss) income | ||||||||||||||||
North America (1) | $ | (6,444 | ) | $ | (9,933 | ) | $ | (15,629 | ) | $ | (82,775 | ) | ||||
Europe (1) | 1,495 | 2,048 | 2,469 | 3,077 | ||||||||||||
Total net loss | $ | (4,949 | ) | $ | (7,885 | ) | $ | (13,160 | ) | $ | (79,698 | ) |
(1) | During the three and six months ended July 31, 2017 and 2016, we included $1.0 million and $0.9 million, respectively, and $1.8 million and $1.7 million of intersegment expense allocations from North America to Europe. |
(In thousands) | July 31, 2017 | January 31, 2017 | |||||
Total assets | |||||||
North America | 690,845 | 716,640 | |||||
Europe | 127,263 | 113,900 | |||||
Total assets | $ | 818,108 | $ | 830,540 | |||
Property and Equipment, net | |||||||
North America | 271,584 | 276,136 | |||||
Europe | 48,911 | 44,571 | |||||
Total property and equipment, net | $ | 320,495 | $ | 320,707 |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Assets | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 8,132 | $ | 16,463 | $ | — | $ | 24,595 | |||||||||
Accounts receivable, net | — | 47,385 | 13,808 | — | 61,193 | ||||||||||||||
Inventories, net | — | 3,815 | 155 | — | 3,970 | ||||||||||||||
Prepaid expenses and other assets | 59 | 2,278 | 1,124 | — | 3,461 | ||||||||||||||
Total current assets | 59 | 61,610 | 31,550 | — | 93,219 | ||||||||||||||
Property and equipment, net | — | 258,243 | 62,252 | — | 320,495 | ||||||||||||||
Goodwill | — | — | 54,836 | — | 54,836 | ||||||||||||||
Other intangible assets, net | — | 324,306 | 23,101 | — | 347,407 | ||||||||||||||
Other assets | — | 1,878 | 273 | — | 2,151 | ||||||||||||||
Investment in subsidiaries | 299,270 | 128,159 | (821 | ) | (426,608 | ) | — | ||||||||||||
Total assets | $ | 299,329 | $ | 774,196 | $ | 171,191 | $ | (426,608 | ) | $ | 818,108 | ||||||||
Liabilities and shareholder’s equity | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable | $ | 23 | $ | 13,977 | $ | 1,926 | $ | — | $ | 15,926 | |||||||||
Accrued expenses | 3,296 | 13,251 | 3,771 | — | 20,318 | ||||||||||||||
Current portion of long-term debt (net of deferred financing costs of $3,162) | 1,000 | — | — | — | 1,000 | ||||||||||||||
Intercompany balances | (337,292 | ) | 302,385 | 34,907 | — | — | |||||||||||||
Total current liabilities | (332,973 | ) | 329,613 | 40,604 | — | 37,244 | |||||||||||||
Long-term debt, net of current portion (net of deferred financing costs of $3,414) | 633,905 | (822 | ) | — | — | 633,083 | |||||||||||||
Deferred tax liabilities, net | (44,135 | ) | 138,986 | 7,593 | — | 102,444 | |||||||||||||
Share-based compensation liability | — | 35 | — | — | 35 | ||||||||||||||
Other long-term liabilities | — | 2,607 | 163 | — | 2,770 | ||||||||||||||
Total liabilities | 256,797 | 470,419 | 48,360 | — | 775,576 | ||||||||||||||
Total shareholder’s equity | 42,532 | 303,777 | 122,831 | (426,608 | ) | 42,532 | |||||||||||||
Total liabilities and shareholder’s equity | $ | 299,329 | $ | 774,196 | $ | 171,191 | $ | (426,608 | ) | $ | 818,108 |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Assets | |||||||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 30,607 | $ | 13,956 | $ | — | $ | 44,563 | |||||||||
Accounts receivable, net | — | 41,902 | 10,576 | — | 52,478 | ||||||||||||||
Inventories, net | — | 3,622 | 99 | — | 3,721 | ||||||||||||||
Prepaid expenses and other current assets | 35 | 3,201 | 909 | — | 4,145 | ||||||||||||||
Total current assets | 35 | 79,332 | 25,540 | — | 104,907 | ||||||||||||||
Property and equipment, net | — | 264,194 | 56,513 | — | 320,707 | ||||||||||||||
Goodwill | — | — | 49,918 | — | 49,918 | ||||||||||||||
Other intangible assets, net | — | 333,033 | 21,385 | — | 354,418 | ||||||||||||||
Other long-term assets | — | 452 | 138 | — | 590 | ||||||||||||||
Investment in subsidiaries | 297,137 | 109,766 | — | (406,903 | ) | — | |||||||||||||
Total assets | $ | 297,172 | $ | 786,777 | $ | 153,494 | $ | (406,903 | ) | $ | 830,540 | ||||||||
Liabilities and shareholder’s equity | |||||||||||||||||||
Current liabilities: | |||||||||||||||||||
Accounts payable | $ | 56 | $ | 15,839 | $ | 1,802 | $ | — | $ | 17,697 | |||||||||
Accrued expenses | 3,258 | 14,377 | 4,220 | — | 21,855 | ||||||||||||||
Current portion of long-term debt (net of deferred financing costs of $3,080) | 1,082 | — | — | — | 1,082 | ||||||||||||||
Intercompany balances | (341,847 | ) | 310,812 | 31,035 | — | — | |||||||||||||
Total current liabilities | (337,451 | ) | 341,028 | 37,057 | — | 40,634 | |||||||||||||
Long-term debt, net of current portion (net of deferred financing costs of $4,183) | 634,395 | — | — | — | 634,395 | ||||||||||||||
Deferred tax liabilities, net | (42,166 | ) | 145,806 | 6,474 | — | 110,114 | |||||||||||||
Share-based compensation liability | — | 66 | — | — | 66 | ||||||||||||||
Other long-term liabilities | — | 2,739 | 197 | — | 2,936 | ||||||||||||||
Total liabilities | 254,778 | 489,639 | 43,728 | — | 788,145 | ||||||||||||||
Total shareholder’s equity | 42,394 | 297,138 | 109,766 | (406,903 | ) | 42,395 | |||||||||||||
Total liabilities and shareholder’s equity | $ | 297,172 | $ | 786,777 | $ | 153,494 | $ | (406,903 | ) | $ | 830,540 |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Revenue | $ | — | $ | 55,239 | $ | 12,962 | $ | — | $ | 68,201 | |||||||||
Operating expenses: | |||||||||||||||||||
Employee related expenses | 3 | 20,615 | 3,415 | — | 24,033 | ||||||||||||||
Rental expense | — | 7,446 | 1,366 | — | 8,812 | ||||||||||||||
Repair and maintenance | — | 3,127 | 314 | — | 3,441 | ||||||||||||||
Cost of goods sold | — | 3,184 | 232 | — | 3,416 | ||||||||||||||
Facility expense | 3 | 6,126 | 722 | — | 6,851 | ||||||||||||||
Professional fees | 15 | 528 | 146 | — | 689 | ||||||||||||||
Other operating expenses | 150 | 1,687 | 1,731 | — | 3,568 | ||||||||||||||
Depreciation and amortization | — | 13,005 | 1,743 | — | 14,748 | ||||||||||||||
Gain on sale of equipment | — | (614 | ) | 8 | — | (606 | ) | ||||||||||||
Impairment of goodwill and other intangible assets | — | 1,000 | — | — | 1,000 | ||||||||||||||
Impairment of long-lived assets | — | 87 | 9 | — | 96 | ||||||||||||||
Total operating expenses | 171 | 56,191 | 9,686 | — | 66,048 | ||||||||||||||
(Loss) income from operations | (171 | ) | (952 | ) | 3,276 | — | 2,153 | ||||||||||||
Other expenses (income): | |||||||||||||||||||
Interest expense, net | 10,170 | 38 | 2 | — | 10,210 | ||||||||||||||
Foreign currency exchange loss (gain), net | — | (532 | ) | 229 | — | (303 | ) | ||||||||||||
Other income, net | — | (10 | ) | — | — | (10 | ) | ||||||||||||
Total other expenses (income), net | 10,170 | (504 | ) | 231 | — | 9,897 | |||||||||||||
(Loss) income before income tax (benefit) expense | (10,341 | ) | (448 | ) | 3,045 | — | (7,744 | ) | |||||||||||
Income tax (benefit) expense | (1,004 | ) | (2,607 | ) | 816 | — | (2,795 | ) | |||||||||||
(Loss) income before equity in net earnings of subsidiaries | (9,337 | ) | 2,159 | 2,229 | — | (4,949 | ) | ||||||||||||
Equity in net earnings of subsidiaries | 4,388 | 2,229 | — | (6,617 | ) | — | |||||||||||||
Net (loss) income | $ | (4,949 | ) | $ | 4,388 | $ | 2,229 | $ | (6,617 | ) | $ | (4,949 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Revenue | $ | — | $ | 51,107 | $ | 12,093 | $ | — | $ | 63,200 | |||||||||
Operating expenses: | |||||||||||||||||||
Employee related expenses | 14 | 21,169 | 3,084 | — | 24,267 | ||||||||||||||
Rental expense | — | 5,822 | 1,018 | — | 6,840 | ||||||||||||||
Repair and maintenance | — | 2,642 | 232 | — | 2,874 | ||||||||||||||
Cost of goods sold | — | 2,133 | 167 | — | 2,300 | ||||||||||||||
Facility expense | 3 | 5,971 | 675 | — | 6,649 | ||||||||||||||
Professional fees | 9 | 921 | 196 | — | 1,126 | ||||||||||||||
Other operating expenses | 136 | 1,614 | 1,648 | — | 3,398 | ||||||||||||||
Depreciation and amortization | — | 13,561 | 1,514 | — | 15,075 | ||||||||||||||
Gain on sale of equipment | — | (969 | ) | (7 | ) | — | (976 | ) | |||||||||||
Impairment of long-lived assets | — | 439 | — | — | 439 | ||||||||||||||
Total operating expenses | 162 | 53,303 | 8,527 | — | 61,992 | ||||||||||||||
(Loss) income from operations | (162 | ) | (2,196 | ) | 3,566 | — | 1,208 | ||||||||||||
Other expenses: | |||||||||||||||||||
Interest expense, net | 10,614 | 12 | — | — | 10,626 | ||||||||||||||
Foreign currency exchange loss | — | 205 | 526 | — | 731 | ||||||||||||||
Other income, net | — | (12 | ) | — | — | (12 | ) | ||||||||||||
Total other expenses | 10,614 | 205 | 526 | — | 11,345 | ||||||||||||||
(Loss) income before income tax (benefit) expense | (10,776 | ) | (2,401 | ) | 3,040 | — | (10,137 | ) | |||||||||||
Income tax (benefit) expense | (1,070 | ) | (1,947 | ) | 765 | — | (2,252 | ) | |||||||||||
(Loss) income before equity in net earnings of subsidiaries | (9,706 | ) | (454 | ) | 2,275 | — | (7,885 | ) | |||||||||||
Equity in net earnings of subsidiaries | 1,821 | 2,275 | — | (4,096 | ) | — | |||||||||||||
Net (loss) income | $ | (7,885 | ) | $ | 1,821 | $ | 2,275 | $ | (4,096 | ) | $ | (7,885 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Revenue | $ | — | $ | 108,035 | $ | 23,305 | $ | — | $ | 131,340 | |||||||||
Operating expenses: | |||||||||||||||||||
Employee related expenses | 7 | 42,337 | 6,629 | — | 48,973 | ||||||||||||||
Rental expense | — | 15,085 | 2,484 | — | 17,569 | ||||||||||||||
Repair and maintenance | — | 6,068 | 541 | — | 6,609 | ||||||||||||||
Cost of goods sold | — | 6,064 | 495 | — | 6,559 | ||||||||||||||
Facility expense | 9 | 12,188 | 1,486 | — | 13,683 | ||||||||||||||
Professional fees | 25 | 1,765 | 258 | — | 2,048 | ||||||||||||||
Other operating expenses | 310 | 3,930 | 3,348 | — | 7,588 | ||||||||||||||
Depreciation and amortization | — | 26,067 | 3,402 | — | 29,469 | ||||||||||||||
Gain on sale of equipment | — | (1,695 | ) | (31 | ) | — | (1,726 | ) | |||||||||||
Impairment of goodwill and other intangible assets | — | 1,000 | — | — | 1,000 | ||||||||||||||
Impairment of long-lived assets | — | 287 | 9 | — | 296 | ||||||||||||||
Total operating expenses | 351 | 113,096 | 18,621 | — | 132,068 | ||||||||||||||
(Loss) income from operations | (351 | ) | (5,061 | ) | 4,684 | — | (728 | ) | |||||||||||
Other expenses (income): | |||||||||||||||||||
Interest expense, net | 20,144 | 55 | (7 | ) | — | 20,192 | |||||||||||||
Foreign currency exchange loss (gain), net | — | (314 | ) | 171 | — | (143 | ) | ||||||||||||
Other income, net | — | (10 | ) | — | — | (10 | ) | ||||||||||||
Total other expenses (income), net | 20,144 | (269 | ) | 164 | — | 20,039 | |||||||||||||
(Loss) income before income tax (benefit) expense | (20,495 | ) | (4,792 | ) | 4,520 | — | (20,767 | ) | |||||||||||
Income tax (benefit) expense | (1,969 | ) | (6,814 | ) | 1,176 | — | (7,607 | ) | |||||||||||
(Loss) income before equity in net earnings of subsidiaries | (18,526 | ) | 2,022 | 3,344 | — | (13,160 | ) | ||||||||||||
Equity in net earnings of subsidiaries | 5,366 | 3,344 | — | (8,710 | ) | — | |||||||||||||
Net (loss) income | $ | (13,160 | ) | $ | 5,366 | $ | 3,344 | $ | (8,710 | ) | $ | (13,160 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Revenue | $ | — | $ | 106,169 | $ | 22,063 | $ | — | $ | 128,232 | |||||||||
Operating expenses: | |||||||||||||||||||
Employee related expenses | 46 | 42,553 | 6,358 | — | 48,957 | ||||||||||||||
Rental expense | — | 12,536 | 1,814 | — | 14,350 | ||||||||||||||
Repair and maintenance | — | 4,774 | 413 | — | 5,187 | ||||||||||||||
Cost of goods sold | — | 5,088 | 274 | — | 5,362 | ||||||||||||||
Facility expense | 11 | 12,226 | 1,368 | — | 13,605 | ||||||||||||||
Professional fees | 61 | 1,828 | 329 | — | 2,218 | ||||||||||||||
Other operating expenses | 294 | 3,551 | 3,137 | — | 6,982 | ||||||||||||||
Depreciation and amortization | — | 27,194 | 2,990 | — | 30,184 | ||||||||||||||
Gain on sale of equipment | — | (1,617 | ) | (17 | ) | — | (1,634 | ) | |||||||||||
Impairment of goodwill and other intangible assets | — | 84,046 | — | — | 84,046 | ||||||||||||||
Impairment of long-lived assets | — | 439 | — | — | 439 | ||||||||||||||
Total operating expenses | 412 | 192,618 | 16,666 | — | 209,696 | ||||||||||||||
(Loss) income from operations | (412 | ) | (86,449 | ) | 5,397 | — | (81,464 | ) | |||||||||||
Other expenses (income): | |||||||||||||||||||
Interest expense, net | 21,131 | 12 | 6 | — | 21,149 | ||||||||||||||
Foreign currency exchange loss (gain), net | — | (404 | ) | 642 | — | 238 | |||||||||||||
Other income, net | — | (12 | ) | — | — | (12 | ) | ||||||||||||
Total other expenses (income), net | 21,131 | (404 | ) | 648 | — | 21,375 | |||||||||||||
(Loss) income before income tax (benefit) expense | (21,543 | ) | (86,045 | ) | 4,749 | — | (102,839 | ) | |||||||||||
Income tax (benefit) expense | (2,153 | ) | (22,172 | ) | 1,184 | — | (23,141 | ) | |||||||||||
(Loss) income before equity in net earnings of subsidiaries | (19,390 | ) | (63,873 | ) | 3,565 | — | (79,698 | ) | |||||||||||
Equity in net earnings of subsidiaries | (60,308 | ) | 3,565 | — | 56,743 | — | |||||||||||||
Net (loss) income | $ | (79,698 | ) | $ | (60,308 | ) | $ | 3,565 | $ | 56,743 | $ | (79,698 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net (loss) income | $ | (4,949 | ) | $ | 4,388 | $ | 2,229 | $ | (6,617 | ) | $ | (4,949 | ) | ||||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | 10,902 | — | 10,902 | ||||||||||||||
Other comprehensive income | — | — | 10,902 | — | 10,902 | ||||||||||||||
Total comprehensive (loss) income | $ | (4,949 | ) | $ | 4,388 | $ | 13,131 | $ | (6,617 | ) | $ | 5,953 |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net (loss) income | $ | (7,885 | ) | $ | 1,821 | $ | 2,275 | $ | (4,096 | ) | $ | (7,885 | ) | ||||||
Other comprehensive income, net of tax: | |||||||||||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 | 292 | — | — | — | 292 | ||||||||||||||
Foreign currency translation adjustments | — | — | (3,216 | ) | — | (3,216 | ) | ||||||||||||
Other comprehensive income, net of tax | 292 | — | (3,216 | ) | — | (2,924 | ) | ||||||||||||
Total comprehensive (loss) income | $ | (7,593 | ) | $ | 1,821 | $ | (941 | ) | $ | (4,096 | ) | $ | (10,809 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net (loss) income | $ | (13,160 | ) | $ | 5,366 | $ | 3,344 | $ | (8,710 | ) | $ | (13,160 | ) | ||||||
Other comprehensive income: | |||||||||||||||||||
Foreign currency translation adjustments | — | — | 12,992 | — | 12,992 | ||||||||||||||
Other comprehensive income | — | — | 12,992 | — | 12,992 | ||||||||||||||
Total comprehensive (loss) income | $ | (13,160 | ) | $ | 5,366 | $ | 16,336 | $ | (8,710 | ) | $ | (168 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Net (loss) income | $ | (79,698 | ) | $ | (60,308 | ) | $ | 3,565 | $ | 56,743 | $ | (79,698 | ) | ||||||
Other comprehensive income, net of tax: | |||||||||||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $365 | 586 | — | — | — | 586 | ||||||||||||||
Foreign currency translation adjustments | — | — | 3,220 | — | 3,220 | ||||||||||||||
Other comprehensive income, net of tax | 586 | — | 3,220 | — | 3,806 | ||||||||||||||
Total comprehensive (loss) income | $ | (79,112 | ) | $ | (60,308 | ) | $ | 6,785 | $ | 56,743 | $ | (75,892 | ) |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Operating activities | |||||||||||||||||||
Net (loss) income | $ | (13,160 | ) | $ | 5,366 | $ | 3,344 | $ | (8,710 | ) | $ | (13,160 | ) | ||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||
Provision for doubtful accounts | — | 443 | 43 | — | 486 | ||||||||||||||
Provision for excess and obsolete inventory | — | (6 | ) | — | — | (6 | ) | ||||||||||||
Share-based compensation expense | 7 | 298 | — | — | 305 | ||||||||||||||
Gain on sale of equipment | — | (1,695 | ) | (31 | ) | — | (1,726 | ) | |||||||||||
Depreciation and amortization | — | 26,067 | 3,402 | — | 29,469 | ||||||||||||||
Amortization of deferred financing costs | 1,509 | — | — | — | 1,509 | ||||||||||||||
Deferred income taxes | (1,969 | ) | (6,820 | ) | 481 | — | (8,308 | ) | |||||||||||
Amortization of above market lease | — | (76 | ) | — | — | (76 | ) | ||||||||||||
Impairment of goodwill and other intangible assets | — | 1,000 | — | — | 1,000 | ||||||||||||||
Impairment of long-lived assets | — | 287 | 9 | — | 296 | ||||||||||||||
Equity in net earnings of subsidiaries, net of taxes | (5,366 | ) | (3,344 | ) | — | 8,710 | — | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Accounts receivable | — | (5,926 | ) | (2,241 | ) | — | (8,167 | ) | |||||||||||
Inventories | — | (187 | ) | (48 | ) | — | (235 | ) | |||||||||||
Prepaid expenses and other assets | (24 | ) | 993 | (288 | ) | — | 681 | ||||||||||||
Accounts payable and other liabilities | 6 | (3,892 | ) | (851 | ) | (2 | ) | (4,739 | ) | ||||||||||
Net cash (used in) provided by operating activities | (18,997 | ) | 12,508 | 3,820 | (2 | ) | (2,671 | ) | |||||||||||
Investing activities | |||||||||||||||||||
Purchases of property and equipment | — | (13,999 | ) | (2,875 | ) | — | (16,874 | ) | |||||||||||
Proceeds from sale of equipment | — | 1,525 | (1,022 | ) | — | 503 | |||||||||||||
Net cash used in investing activities | — | (12,474 | ) | (3,897 | ) | — | (16,371 | ) | |||||||||||
Financing activities | |||||||||||||||||||
Intercompany investments and loans | 21,078 | (22,509 | ) | 3,877 | (2,446 | ) | — | ||||||||||||
Repayments of long-term debt | (2,081 | ) | — | — | — | (2,081 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 18,997 | (22,509 | ) | 3,877 | (2,446 | ) | (2,081 | ) | |||||||||||
Effect of foreign currency translation on cash | — | — | (1,293 | ) | 2,448 | 1,155 | |||||||||||||
Net (decrease) increase in cash and cash equivalents | — | (22,475 | ) | 2,507 | — | (19,968 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | — | 30,607 | 13,956 | — | 44,563 | ||||||||||||||
Cash and cash equivalents, end of period | $ | — | $ | 8,132 | $ | 16,463 | $ | — | $ | 24,595 |
Parent | Guarantors | Non- Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||
Operating activities | |||||||||||||||||||
Net (loss) income | $ | (79,698 | ) | $ | (60,308 | ) | $ | 3,565 | $ | 56,743 | $ | (79,698 | ) | ||||||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||||||||||||||
Provision for doubtful accounts, net | — | 510 | (75 | ) | — | 435 | |||||||||||||
Share-based compensation expense | 46 | (85 | ) | — | — | (39 | ) | ||||||||||||
Gain on sale of equipment | — | (1,617 | ) | (17 | ) | — | (1,634 | ) | |||||||||||
Depreciation and amortization | — | 27,194 | 2,990 | — | 30,184 | ||||||||||||||
Amortization of deferred financing costs | 1,432 | — | — | — | 1,432 | ||||||||||||||
Deferred income taxes | (2,152 | ) | (22,174 | ) | — | — | (24,326 | ) | |||||||||||
Amortization of above market lease | — | (76 | ) | — | — | (76 | ) | ||||||||||||
Impairment of goodwill and other intangible assets | — | 84,046 | — | — | 84,046 | ||||||||||||||
Impairment of long-lived assets | — | 439 | — | — | 439 | ||||||||||||||
Equity in net earnings of subsidiaries, net of taxes | 60,308 | (3,565 | ) | — | (56,743 | ) | — | ||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Accounts receivable | — | 7,588 | (3,017 | ) | — | 4,571 | |||||||||||||
Inventories | — | 4,069 | 1 | — | 4,070 | ||||||||||||||
Prepaid expenses and other current assets | (33 | ) | (388 | ) | 37 | — | (384 | ) | |||||||||||
Accounts payable and other liabilities | (54 | ) | (6,982 | ) | 772 | — | (6,264 | ) | |||||||||||
Net cash (used in) provided by operating activities | (20,151 | ) | 28,651 | 4,256 | — | 12,756 | |||||||||||||
Investing activities | |||||||||||||||||||
Purchases of property and equipment | — | (22,201 | ) | (2,478 | ) | — | (24,679 | ) | |||||||||||
Proceeds from sale of equipment | — | 2,401 | 113 | — | 2,514 | ||||||||||||||
Net cash used in investing activities | — | (19,800 | ) | (2,365 | ) | — | (22,165 | ) | |||||||||||
Financing activities | |||||||||||||||||||
Intercompany investments and loans | 22,240 | (21,181 | ) | (480 | ) | (579 | ) | — | |||||||||||
Repayment of long-term debt | (2,081 | ) | — | — | — | (2,081 | ) | ||||||||||||
Return of capital to BakerCorp International Holdings, Inc. | (8 | ) | — | — | — | (8 | ) | ||||||||||||
Net cash provided by (used in) financing activities | 20,151 | (21,181 | ) | (480 | ) | (579 | ) | (2,089 | ) | ||||||||||
Effect of foreign currency translation on cash | — | — | (198 | ) | 579 | 381 | |||||||||||||
Net (decrease) increase in cash and cash equivalents | — | (12,330 | ) | 1,213 | — | (11,117 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | — | 34,014 | 10,740 | — | 44,754 | ||||||||||||||
Cash and cash equivalents, end of period | $ | — | $ | 21,684 | $ | 11,953 | $ | — | $ | 33,637 |
• | Overview; |
• | Critical Accounting Policies, Estimates, and Judgments; |
• | Results of Operations; and |
• | Liquidity and Capital Resources. |
• | Commit to safety. We focus on ensuring a safe and healthy working environment for our employees, customers and communities where we live and work. We execute this through a program called BakerZero. Through this program, we develop and implement policies and procedures to govern and promote workplace safety, including regular management safety reviews, daily branch safety training sessions and a disciplinary action program for incidents that result from non-compliance with our safety programs. |
• | Increase our Penetration in Key Industries and Evaluate Opportunities for End Market Expansion. Our low customer concentration, diversity of end markets, and long-standing relationships allow us to capitalize on market and macroeconomic trends while providing a hedge against more volatile industries. |
• | Maintain Commercial Excellence Through Comprehensive Equipment Rental Solutions. As the premier global specialty rental company in our market, we have one of the largest branch networks with a broad equipment and service offering. We distinguish ourselves from our competitors and build customer loyalty by leveraging our extensive network to provide integrated and differentiated rental solutions. |
• | Achieve Operational Excellence by Continuously Developing our Systems and Processes. We are focused on company-wide process improvements such as cost leverage initiatives, equipment rent ready optimization for the branch network, fleet optimization through our newly developed Asset Management System (“AMS”) and advanced Quality Management System (“QMS”). |
• | Expand Geographically. Historically, we have increased penetration in new geographic regions and generated profitable growth by opening new branches within North America and Europe and introducing our products and services. We believe there is an opportunity to continue to open new branches in Europe and in certain under-served regions of North America. |
• | Retain the Most Talented Employees in the Industry. Through our best in class training programs and new annual goal-setting and performance management process, we ensure that our workforce is aligned to deliver the highest value to our shareholders, customers, and employees. |
• | Pursue Selected Acquisitions. Our markets remain fragmented and have historically presented numerous attractive acquisition candidates. We intend to pursue potential acquisitions that offer complementary products and services or expand our geographic footprint. |
July 31, | ||||||||
2017 | 2016 | Change | ||||||
Branches: | ||||||||
Number of branches-North American Segment | 46 | 48 | (2 | ) | ||||
Number of branches-European Segment | 11 | 11 | — | |||||
Total branches | 57 | 59 | (2 | ) | ||||
Employees: | ||||||||
Number of employees-North American Segment | 769 | 770 | (1 | ) | ||||
Number of employees-European Segment | 146 | 122 | 24 | |||||
Total employees | 915 | 892 | 23 |
• | Rental Activity – The change in rental activity is measured by the impact of several items, including the utilization of rental equipment that we individually track which reflects the demand for our products in relation to the level of equipment, volume of rental revenue on bulk items not individually tracked (which includes pipes, hoses, fittings, and shoring), and volume of re-rent revenue, resulting from the rental of equipment which we do not own. |
• | Pricing – The impact of changes in pricing is measured by the increase or declines in the average daily, weekly or monthly rental rates on the serialized rental equipment that we specifically track. |
• | Available Rental Fleet – The available rental fleet, as we define it, is the average number of equipment items within our fleet that we individually track. |
• | Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our debt obligations. |
• | Our debt agreements contain restrictions that limit our flexibility in operating our business. |
• | Our business is subject to the general health of the economy, and accordingly any slowdown in the current economy or decrease in general economic activity could materially adversely affect our revenue and operating results. |
• | Continuing or sustained decline in oil prices and/or natural gas prices at or below current levels could have a negative impact on our operating results. |
• | Ongoing government review of hydraulic fracturing and its environmental impact could lead to changes to this activity or its substantial curtailment, which could materially adversely affect our revenue and results of operations. |
• | We intend to expand our business into new geographic markets, and this expansion may be costly and may not be successful. |
• | Our growth strategy includes evaluating selective acquisitions, which entails certain risks to our business and financial performance. |
• | We intend to expand into new product lines, which may be costly and may not ultimately be successful. |
• | We depend on our suppliers for the equipment we rent to customers. |
• | As our rental equipment ages, we may face increased costs to maintain, repair, and replace that equipment and new equipment could become more expensive. |
• | The short term nature of our rental arrangements exposes us to redeployment risks and means that we could experience rapid fluctuations in revenue in response to market conditions. |
• | Our customers may decide to begin providing their own liquid and solid containment solutions rather than sourcing those products from us. |
• | Our industry is highly competitive, and competitive pressures could lead to a decrease in our market share or in the prices that we may charge. |
• | We lease all of our branch locations, and accordingly are subject to the risk of substantial changes to the real estate rental markets and our relationships with our landlords. |
• | Our business is subject to numerous environmental and safety regulations. If we are required to incur significant compliance or remediation costs, our liquidity and operating results could be materially adversely affected. |
• | Changes in the many laws and regulations to which we are subject in the United States, Europe and Canada, or our failure to comply with them, could materially adversely affect our business. |
• | We have operations outside the United States. As a result, we may incur losses from currency fluctuations. |
• | Turnover of our management and our ability to attract and retain other key personnel may affect our ability to efficiently manage our business and execute our strategy. |
• | If our employees should unionize, this could impact our costs and ability to administer our business. |
• | We are exposed to a variety of claims relating to our business, and our insurance may not fully cover them. |
• | Disruptions in our information technology systems could materially adversely affect our operating results by limiting our capacity to effectively monitor and control our operations and provide effective services to our customers. |
• | Fluctuations in fuel costs or reduced supplies of fuel could harm our business. |
• | If we are unable to collect on contracts with customers, our operating results would be materially adversely affected. |
• | Climate change, climate change regulations, and greenhouse effects may materially adversely impact our operations and markets. |
• | Existing trucking regulations and changes in trucking regulations may increase our costs and negatively impact our results of operations. |
• | We may be required to recognize additional impairment charges in the future which could have an adverse effect on our financial condition and results of operations. |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||
(In thousands, except percentages) | Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||
Rental revenue | $ | 54,654 | 80.1 | % | $ | 51,444 | 81.4 | % | $ | 105,467 | 80.3 | % | $ | 103,765 | 80.9 | % | ||||||||||||
Sales revenue | 5,230 | 7.7 | % | 3,762 | 6.0 | % | 9,928 | 7.6 | % | 8,696 | 6.8 | % | ||||||||||||||||
Service revenue | 8,317 | 12.2 | % | 7,994 | 12.6 | % | 15,945 | 12.1 | % | 15,771 | 12.3 | % | ||||||||||||||||
Total revenue | 68,201 | 100.0 | % | 63,200 | 100.0 | % | 131,340 | 100.0 | % | 128,232 | 100.0 | % | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||
Employee related expenses | 24,033 | 35.2 | % | 24,267 | 38.4 | % | 48,973 | 37.3 | % | 48,957 | 38.2 | % | ||||||||||||||||
Rental expenses | 8,812 | 12.9 | % | 6,840 | 10.8 | % | 17,569 | 13.4 | % | 14,350 | 11.2 | % | ||||||||||||||||
Repair and maintenance | 3,441 | 5.0 | % | 2,874 | 4.5 | % | 6,609 | 5.0 | % | 5,187 | 4.0 | % | ||||||||||||||||
Cost of goods sold | 3,416 | 5.0 | % | 2,300 | 3.6 | % | 6,559 | 5.0 | % | 5,362 | 4.2 | % | ||||||||||||||||
Facility expenses | 6,851 | 10.0 | % | 6,649 | 10.5 | % | 13,683 | 10.4 | % | 13,605 | 10.6 | % | ||||||||||||||||
Professional fees | 689 | 1.0 | % | 1,126 | 1.8 | % | 2,048 | 1.6 | % | 2,218 | 1.7 | % | ||||||||||||||||
Other operating expenses | 3,568 | 5.2 | % | 3,398 | 5.4 | % | 7,588 | 5.8 | % | 6,982 | 5.4 | % | ||||||||||||||||
Depreciation and amortization | 14,748 | 21.6 | % | 15,075 | 23.9 | % | 29,469 | 22.4 | % | 30,184 | 23.5 | % | ||||||||||||||||
Gain on sale of equipment | (606 | ) | (0.9 | )% | (976 | ) | (1.5 | )% | (1,726 | ) | (1.3 | )% | (1,634 | ) | (1.3 | )% | ||||||||||||
Impairment of goodwill and other intangible assets | 1,000 | 1.5 | % | — | — | % | 1,000 | 0.8 | % | 84,046 | 65.5 | % | ||||||||||||||||
Impairment of long-lived assets | 96 | 0.1 | % | 439 | 0.7 | % | 296 | 0.2 | % | 439 | 0.3 | % | ||||||||||||||||
Total operating expenses | 66,048 | 96.6 | % | 61,992 | 98.1 | % | 132,068 | 100.6 | % | 209,696 | 163.3 | % | ||||||||||||||||
Income (loss) from operations | 2,153 | 3.4 | % | 1,208 | 1.9 | % | (728 | ) | (0.6 | )% | (81,464 | ) | (63.3 | )% | ||||||||||||||
Other expense: | ||||||||||||||||||||||||||||
Interest expense, net | 10,210 | 15.0 | % | 10,626 | 16.8 | % | 20,192 | 15.4 | % | 21,149 | 16.5 | % | ||||||||||||||||
Foreign currency exchange loss (gain), net | (303 | ) | (0.4 | )% | 731 | 1.2 | % | (143 | ) | (0.1 | )% | 238 | 0.2 | % | ||||||||||||||
Other income, net | (10 | ) | — | % | (12 | ) | — | % | (10 | ) | — | % | (12 | ) | — | % | ||||||||||||
Total other expenses, net | 9,897 | 14.6 | % | 11,345 | 18.0 | % | 20,039 | 15.3 | % | 21,375 | 16.7 | % | ||||||||||||||||
Loss before income taxes | (7,744 | ) | (11.2 | )% | (10,137 | ) | (16.1 | )% | (20,767 | ) | (15.9 | )% | (102,839 | ) | (80.0 | )% | ||||||||||||
Income tax benefit | (2,795 | ) | (4.1 | )% | (2,252 | ) | (3.6 | )% | (7,607 | ) | (5.8 | )% | (23,141 | ) | (18.0 | )% | ||||||||||||
Net loss | $ | (4,949 | ) | (7.1 | )% | $ | (7,885 | ) | (12.5 | )% | $ | (13,160 | ) | (10.1 | )% | $ | (79,698 | ) | (62.0 | )% |
Three Months Ended July 31, | Six Months Ended July 31, | ||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net loss | $ | (4,949 | ) | $ | (7,885 | ) | $ | (13,160 | ) | $ | (79,698 | ) | |||
Interest expense, net | 10,210 | 10,626 | 20,192 | 21,149 | |||||||||||
Income tax benefit | (2,795 | ) | (2,252 | ) | (7,607 | ) | (23,141 | ) | |||||||
Depreciation and amortization | 14,748 | 15,075 | 29,469 | 30,184 | |||||||||||
EBITDA | $ | 17,214 | $ | 15,564 | $ | 28,894 | $ | (51,506 | ) | ||||||
Foreign currency exchange loss (gain), net | (303 | ) | 731 | (143 | ) | 238 | |||||||||
Financing related costs | 36 | 31 | 72 | 66 | |||||||||||
Severance related costs | 46 | 535 | 46 | 584 | |||||||||||
Sponsor management fees | 125 | 141 | 258 | 279 | |||||||||||
Share-based compensation expense (income) | 167 | 233 | 305 | (39 | ) | ||||||||||
Impairment of goodwill and other intangible assets | 1,000 | — | 1,000 | 84,046 | |||||||||||
Impairment of long-lived assets | 96 | 439 | 296 | 439 | |||||||||||
Branch closure and consolidation | 33 | (19 | ) | 78 | 85 | ||||||||||
Rent ready optimization concept | 218 | — | 326 | ||||||||||||
Tax and accounting related fees | 28 | 203 | 287 | 239 | |||||||||||
Capital conversion | 282 | — | 562 | — | |||||||||||
Other | 207 | 168 | 302 | 69 | |||||||||||
Adjusted EBITDA | $ | 19,149 | $ | 18,026 | $ | 32,283 | $ | 34,500 | |||||||
Adjusted EBITDA margin | 28.1 | % | 28.5 | % | 24.6 | % | 26.9 | % |
Three Months Ended July 31, | ||||||||||||||
(In thousands, except Operating Data) | 2017 | 2016 | $ Change | % Change | ||||||||||
North America | ||||||||||||||
Rental revenue | $ | 44,765 | $ | 41,759 | $ | 3,006 | 7.2 | % | ||||||
Sales revenue | 4,972 | 3,732 | 1,240 | 33.2 | % | |||||||||
Service revenue | 7,536 | 7,246 | 290 | 4.0 | % | |||||||||
Total North America revenue | 57,273 | 52,737 | 4,536 | 8.6 | % | |||||||||
Total operating expenses(3) | 58,956 | 56,075 | 2,881 | 5.1 | % | |||||||||
Loss from operations | $ | (1,683 | ) | $ | (3,338 | ) | $ | 1,655 | 49.6 | % | ||||
Europe | ||||||||||||||
Rental revenue | $ | 9,889 | $ | 9,685 | $ | 204 | 2.1 | % | ||||||
Sales revenue | 258 | 30 | 228 | 100.0 | % | |||||||||
Service revenue | 781 | 748 | 33 | 4.4 | % | |||||||||
Total European revenue | 10,928 | 10,463 | 465 | 4.4 | % | |||||||||
Total operating expenses(3) | 7,092 | 5,917 | 1,175 | 19.9 | % | |||||||||
Income from operations | $ | 3,836 | $ | 4,546 | $ | (710 | ) | (15.6 | )% | |||||
Consolidated | ||||||||||||||
Total revenue | $ | 68,201 | $ | 63,200 | $ | 5,001 | 7.9 | % | ||||||
Total operating expenses | 66,048 | 61,992 | 4,056 | 6.5 | % | |||||||||
Total loss from operations | $ | 2,153 | $ | 1,208 | $ | 945 | (78.2 | )% | ||||||
Operating Data: | ||||||||||||||
North America | ||||||||||||||
Average utilization (1) | 48.6 | % | 41.8 | % | 680 | bps | ||||||||
Average daily rental rate (2) | $ | 28.55 | $ | 30.32 | $ | (1.77 | ) | (5.8 | )% | |||||
Average number of rental units | 22,649 | 23,515 | (866) | (3.7 | )% | |||||||||
Europe | ||||||||||||||
Average utilization (1) | 43.2 | % | 55.0 | % | (1,180 | ) bps | ||||||||
Average daily rental rate (2) | $ | 83.90 | $ | 88.45 | $ | (4.55 | ) | (5.1 | )% | |||||
Average number of rental units | 2,083 | 1,544 | 539 | 34.9 | % | |||||||||
Consolidated | ||||||||||||||
Average utilization (1) | 48.1 | % | 42.6 | % | 550 | bps | ||||||||
Average daily rental rate (2) | $ | 32.73 | $ | 34.94 | $ | (2.21 | ) | (6.3 | )% | |||||
Average number of rental units | 24,732 | 25,059 | (327) | (1.3 | )% |
(1) | The average utilization of rental fleet is a measure of efficiency used by management; it represents the percentage of time a unit of equipment is on-rent during a given period. It is not a U.S. GAAP financial measure. |
(2) | The average daily rental rate is used by management to gauge the daily rate of rental equipment that we specifically track during a given period. It is not a U.S. GAAP financial measure. |
(3) | Total operating expenses by reporting segment excludes inter-segment allocations from North America to Europe of $1.0 million and $0.9 million for the three months ended July 31, 2017 and 2016, respectively. |
• | $1.7 million increase in rental expenses primarily due to a $0.7 million increase in outside hauling due to the repositioning of assets to meet market demands as well as cost to transport our assets to refurbishment centers. Rebill and rerent expenses increased $0.9 million as a result of higher rental revenue. |
• | $1.0 million increase in cost of goods sold as a result of higher sales revenue and the recognition of revenue on one of our fixed installation electrocoagulation jobs. |
• | $0.5 million increase in repair and maintenance expense as part of our initiative to get the majority of our network Rental Ready Optimization Concept (“RROC”) certified. The RROC program has many features, in particular maintaining certain levels of rent readiness throughout the network in anticipation of demand. |
• | $0.4 million decrease in the gain on sale of equipment due to lower used equipment sales. |
• | $0.2 million increase in other operating expenses due to higher travel and personnel recruiting. |
• | $1.0 million increase in other intangible assets impairment due to a lower than projected forecast. |
• | $0.6 million decrease in employee related expenses is primarily related to a $0.3 million decrease in severance costs and a $0.3 million decrease in workers’ compensation. The decline in severance expense is due to a charge during the three months ended July 31, 2016 that did not occur during the three months ended July 31, 2017. Workers’ compensation declined due to lower rates in fiscal year 2018 and a $0.2 million overpayment. |
• | $0.6 million decrease in depreciation and amortization expense due to more assets becoming fully depreciated before the start of fiscal year 2018 than the depreciation on newly acquired assets as well as the impairment of certain identified assets during the year ended January 31, 2017. |
• | $0.4 million decrease in professional fees due to the reversal of a legal accrual due to the expiration of the statute of limitations and lower accounting fees. |
• | $0.3 million decrease related to an impairment of $0.4 million during the three months ended July 31, 2016 that did not occur to the same degree during the three months ended July 31, 2017. |
• | $0.4 million increase in employee related expenses primarily in wages for operations. Employee related expenses increased primarily due to an increase in headcount of 24 employees, or 19.7%, from 122 employees as of July 31, 2016 to 146 employees as of July 31, 2017. |
• | $0.3 million increase in rental expenses to reposition equipment to locations with the highest utilization resulting in an increase in rental revenue. |
• | $0.2 million increase in depreciation and amortization expense as a result of the increase in fixed assets specifically related to the introduction of the pump and filtration business line. |
Six Months Ended July 31, | ||||||||||||||
(In thousands, except Operating Data) | 2017 | 2016 | $ Change | % Change | ||||||||||
North America | ||||||||||||||
Rental revenue | $ | 87,469 | $ | 86,224 | $ | 1,245 | 1.4 | % | ||||||
Sales revenue | 9,470 | 8,658 | 812 | 9.4 | % | |||||||||
Service revenue | 14,512 | 14,330 | 182 | 1.3 | % | |||||||||
Total North America revenue | 111,451 | 109,212 | 2,239 | 2.1 | % | |||||||||
Total operating expenses(3) | 118,438 | 197,979 | (79,541 | ) | (40.2 | )% | ||||||||
Loss from operations | $ | (6,987 | ) | $ | (88,767 | ) | $ | 81,780 | 92.1 | % | ||||
Europe | ||||||||||||||
Rental revenue | 17,998 | $ | 17,541 | $ | 457 | 2.6 | % | |||||||
Sales revenue | 458 | $ | 38 | 420 | 100.0 | % | ||||||||
Service revenue | 1,433 | $ | 1,441 | (8 | ) | (0.6 | )% | |||||||
Total European revenue | 19,889 | 19,020 | 869 | 4.6 | % | |||||||||
Total operating expenses(3) | 13,630 | 11,717 | 1,913 | 16.3 | % | |||||||||
Income from operations | $ | 6,259 | $ | 7,303 | $ | (1,044 | ) | 14.3 | % | |||||
Consolidated | ||||||||||||||
Total revenue | $ | 131,340 | $ | 128,232 | $ | 3,108 | 2.4 | % | ||||||
Total operating expenses | 132,068 | 209,696 | (77,628 | ) | (37.0 | )% | ||||||||
Total loss from operations | $ | (728 | ) | $ | (81,464 | ) | $ | 80,736 | 99.1 | % | ||||
Operating Data: | ||||||||||||||
North America | ||||||||||||||
Average utilization (1) | 47.1 | % | 43.7 | % | 340 | bps | ||||||||
Average daily rental rate (2) | $ | 28.93 | $ | 30.07 | $ | (1.14 | ) | (3.8 | )% | |||||
Average number of rental units | 22,679 | 23,302 | (623) | (2.7 | )% | |||||||||
Europe | ||||||||||||||
Average utilization (1) | 41.2 | % | 50.8 | % | (960 | ) bps | ||||||||
Average daily rental rate (2) | $ | 82.86 | $ | 88.33 | $ | (5.47 | ) | (6.2 | )% | |||||
Average number of rental units | 2,032 | 1,521 | 511 | 33.6 | % | |||||||||
Consolidated | ||||||||||||||
Average utilization (1) | 46.6 | % | 44.1 | % | 250 | bps | ||||||||
Average daily rental rate (2) | $ | 32.85 | $ | 34.18 | $ | (1.33 | ) | (3.9 | )% | |||||
Average number of rental units | 24,711 | 24,823 | (112) | (0.5 | )% |
(1) | The average utilization of rental fleet is a measure of efficiency used by management; it represents the percentage of time a unit of equipment is on-rent during a given period. It is not a U.S. GAAP financial measure. |
(2) | The average daily rental rate is used by management to gauge the daily rate of rental equipment that we specifically track during a given period. It is not a U.S. GAAP financial measure. |
(3) | Total operating expenses by reporting segment excludes inter-segment allocations from North America to Europe of $1.8 million and 1.7 million for the six months ended July 31, 2017 and 2016, respectively. |
• | $83.0 million decrease in goodwill and other intangible asset impairments was due to a $84.0 goodwill impairment recorded during the first quarter of the fiscal 2016, partially offset by an impairment of our trade name indefinite-lived intangible asset of $1.0 million recorded during the three months ended July 31, 2017. |
• | $1.1 million decrease in depreciation and amortization expense due to more assets becoming fully depreciated before the start of fiscal year 2018 than the depreciation on new assets as well as the impairment of certain identified assets during the year ended January 31, 2017. |
• | $0.3 million decrease in employee related expenses primarily due to a $0.6 million decrease in bonus, and a $0.4 million decrease in severance. The decrease in bonus expense was the result of our operating results being less than expected. The decrease in severance is due to a charge during the prior year that did not occur in the current period. These decreases were partially offset by an increase in insurance costs of $0.4 million due to a number of large claims in health insurance under our self-insured plan offset by lower workers comp insurance. Share-based compensation expense increased $0.3 million due to the reduction of share-based compensation as a result of the remeasurement of stock option awards accounted for as liability awards during the period ended July 31, 2016. |
• | $2.7 million increase in rental expense primarily due to a $1.6 million increase in outside hauling due to the repositioning of assets to meet market demands as well as costs to transport our assets to refurbishment centers. |
• | $1.3 million increase in repair and maintenance primarily due to the $0.6 million reversal of a regulatory liability in the period ended July 31, 2016 and a $0.6 million increase in rental asset repair and maintenance. |
• | $0.8 million increase in cost of goods due to the recognition of revenue on one of our fixed installation electrocoagulation jobs. |
• | $0.5 million increase in other operating expenses primarily due to a $0.3 million increase to personnel, recruitment and travel. |
• | $0.5 million increase in rental expenses related to the reposition of equipment to locations with the highest utilization resulting in an increase in rental revenue. |
• | $0.3 million increase in employee related expenses due to the increase in headcount to support the growth in the European business. Our headcount increased by 24 employees, or 19.7%, from 122 employees as of July 31, 2016 to 146 employees as of July 31, 2017. |
• | $0.3 million increase in filtration cost of sales due to increased sales revenue. The increase in sales revenue is a byproduct of our increased rental revenue. |
• | $0.3 million increase in facility expenses to support our growth of equipment at our branch locations and our increase in revenue. |
• | $0.1 million increase in other operating expenses primarily related to staffing and business development |
(In thousands) | July 31, 2017 | January 31, 2017 | $ Change | % Change | ||||||||||
United States | $ | 8,132 | $ | 30,608 | $ | (22,476 | ) | (73.4 | )% | |||||
Europe | 14,816 | 13,438 | 1,378 | 10.3 | % | |||||||||
Canada | 1,647 | 517 | 1,130 | 218.6 | % | |||||||||
Total cash and cash equivalents | $ | 24,595 | $ | 44,563 | $ | (19,968 | ) | (44.8 | )% |
• | to expand our fleet of current product lines within markets where we already operate; |
• | to enter new geographic regions; |
• | to add additional product offerings in response to customer or market demands; and |
• | to replace equipment that has been retired because it is no longer functional. |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Credit Facility interest and fees(1) | $ | 4,777 | $ | 4,867 | $ | 9,636 | $ | 9,637 | ||||||||
Notes interest and fees (2) | 5,304 | 5,274 | 10,600 | 10,541 | ||||||||||||
Total interest and fees | $ | 10,081 | $ | 10,141 | $ | 20,236 | $ | 20,178 |
(1) | Interest on the Amended Term Loan is payable quarterly based upon an interest rate of 4.25%. |
(2) | Interest on the Notes is payable semi-annually based upon a fixed annual rate of 8.25%. |
(In thousands) | |||
Remainder of the fiscal year ending January 31, 2018 | $ | 2,082 | |
2019 | 4,163 | ||
2020 | 634,414 | ||
Total | $ | 640,659 |
Six Months Ended July 31, | |||||||||||
(In thousands) | 2017 | 2016 | $ Change | ||||||||
Net loss | $ | (13,160 | ) | $ | (79,698 | ) | $ | 66,538 | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Provision for doubtful accounts | 486 | 435 | 51 | ||||||||
Provision for excess and obsolete inventory, net | (6 | ) | — | (6 | ) | ||||||
Share-based compensation expense | 305 | (39 | ) | 344 | |||||||
Gain on sale of equipment | (1,726 | ) | (1,634 | ) | (92 | ) | |||||
Depreciation and amortization | 29,469 | 30,184 | (715 | ) | |||||||
Amortization of deferred financing costs | 1,509 | 1,432 | 77 | ||||||||
Deferred income taxes | (8,308 | ) | (24,326 | ) | 16,018 | ||||||
Amortization of above-market lease | (76 | ) | (76 | ) | — | ||||||
Impairment of goodwill and other intangible assets | 1,000 | 84,046 | (83,046 | ) | |||||||
Impairment of long-lived assets | 296 | 439 | (143 | ) | |||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (8,167 | ) | 4,571 | (12,738 | ) | ||||||
Inventories | (235 | ) | 4,070 | (4,305 | ) | ||||||
Prepaid expenses and other assets | 681 | (384 | ) | 1,065 | |||||||
Accounts payable and other liabilities | (4,739 | ) | (6,264 | ) | 1,525 | ||||||
Cash (used in) provided by operating activities | (2,671 | ) | 12,756 | (15,427 | ) | ||||||
Cash used in investing activities | (16,371 | ) | (22,165 | ) | 5,794 | ||||||
Cash used in financing activities | (2,081 | ) | (2,089 | ) | — | ||||||
Effect of foreign currency translation on cash | 1,155 | 381 | 774 | ||||||||
Net decrease in cash and cash equivalents | $ | (19,968 | ) | $ | (11,117 | ) | $ | (8,851 | ) |
• | The change in accounts receivable resulted in a $12.7 million decrease to cash provided by operating activities as a result of declining revenues during the six months ended July 31, 2016 compared to growing revenues during the six months ended July 31, 2017. |
• | The change in inventories resulted in a $4.3 million decrease to cash provided by operating activities due to the completion and transfer of assembled equipment to our rental fleet. |
• | The change in the impairment of long-lived assets resulted in a $0.1 million decrease due to a higher impairment in the prior fiscal period. |
• | The change in depreciation and amortization resulted in a $0.7 million decrease, primarily due to the higher disposition of aged equipment and the impairment of long-lived assets in the third quarter of fiscal year 2017. |
• | Net loss decreased $66.5 million from a net loss of $79.7 million during the six months ended July 31, 2016 to a net loss of $13.2 million during the six months ended July 31, 2017. |
• | The change in deferred income taxes resulted in a $16.0 million increase to cash provided by operating activities. |
• | The change in accounts payable and other liabilities resulted in a $1.5 million increase to cash used in operating activities primarily due to cost saving initiatives implemented in the current year. |
• | The change in prepaid expenses and other assets resulted in a $1.1 million increase, primarily due to a decrease in payments of software support subscriptions and collections of miscellaneous receivables. |
• | The change in share-based compensation expense resulted in a $0.3 million increase, primarily due to the remeasurement of our stock options accounted for as liability awards in the six months ended July 31, 2016. |
BAKERCORP INTERNATIONAL, INC. | |||
Date: | September 14, 2017 | By: | /s/ Robert Craycraft |
Robert Craycraft | |||
President and Chief Executive Officer | |||
By: | /s/ Raymond Aronoff | ||
Raymond Aronoff | |||
Chief Operating Officer and Chief Financial Officer |
Exhibit Number | Description | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
1. | I have reviewed this quarterly report on Form 10-Q for the period ended July 31, 2017 of BakerCorp International, 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 on, 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)) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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. |
September 14, 2017 | /s/ Robert Craycraft |
Robert Craycraft | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q for the period ended July 31, 2017 of BakerCorp International, 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)) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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. |
September 14, 2017 | /s/ Raymond Aronoff |
Raymond Aronoff | |
Vice President, Chief Operating Officer and Chief Financial Officer |
(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. |
September 14, 2017 | /s/ Robert Craycraft |
Robert Craycraft | |
President and Chief Executive Officer | |
September 14, 2017 | /s/ Raymond Aronoff |
Raymond Aronoff | |
Vice President, Chief Operating Officer and Chief Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
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Jul. 31, 2017 |
Sep. 13, 2017 |
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Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2017 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ck0001550377 | |
Entity Registrant Name | BakerCorp International, Inc. | |
Entity Central Index Key | 0001550377 | |
Current Fiscal Year End Date | --01-28 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 100 |
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
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Allowance for doubtful accounts | $ 5,511 | $ 5,152 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 100,000 | 100,000 |
Common stock, shares issued (shares) | 100 | 100 |
Common stock, shares outstanding (shares) | 100 | 100 |
Long-term Debt | ||
Deferred financing costs, current | $ 3,162 | $ 3,080 |
Deferred financing costs, noncurrent | $ 3,414 | $ 4,183 |
Consolidated Condensed Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
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Revenue: | ||||
Rental revenue | $ 54,654 | $ 51,444 | $ 105,467 | $ 103,765 |
Sales revenue | 5,230 | 3,762 | 9,928 | 8,696 |
Service revenue | 8,317 | 7,994 | 15,945 | 15,771 |
Total revenue | 68,201 | 63,200 | 131,340 | 128,232 |
Operating expenses: | ||||
Employee related expenses | 24,033 | 24,267 | 48,973 | 48,957 |
Rental expenses | 8,812 | 6,840 | 17,569 | 14,350 |
Repair and maintenance | 3,441 | 2,874 | 6,609 | 5,187 |
Cost of goods sold | 3,416 | 2,300 | 6,559 | 5,362 |
Facility expenses | 6,851 | 6,649 | 13,683 | 13,605 |
Professional fees | 689 | 1,126 | 2,048 | 2,218 |
Other operating expenses | 3,568 | 3,398 | 7,588 | 6,982 |
Depreciation and amortization | 14,748 | 15,075 | 29,469 | 30,184 |
Gain on sale of equipment | (606) | (976) | (1,726) | (1,634) |
Impairment of goodwill and other intangible assets | 1,000 | 0 | 1,000 | 84,046 |
Impairment of long-lived assets | 96 | 439 | 296 | 439 |
Total operating expenses | 66,048 | 61,992 | 132,068 | 209,696 |
Income (loss) from operations | 2,153 | 1,208 | (728) | (81,464) |
Other expenses: | ||||
Interest expense, net | 10,210 | 10,626 | 20,192 | 21,149 |
Foreign currency exchange (gain) loss, net | (303) | 731 | (143) | 238 |
Other income, net | (10) | (12) | (10) | (12) |
Total other expenses, net | 9,897 | 11,345 | 20,039 | 21,375 |
Loss before income tax benefit | (7,744) | (10,137) | (20,767) | (102,839) |
Income tax benefit | (2,795) | (2,252) | (7,607) | (23,141) |
Net loss | $ (4,949) | $ (7,885) | $ (13,160) | $ (79,698) |
Consolidated Condensed Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||
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Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
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Statement of Comprehensive Income [Abstract] | ||||||||||
Net loss | $ (4,949) | $ (7,885) | $ (13,160) | $ (79,698) | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | 0 | 292 | [1] | 0 | 586 | [2] | ||||
Foreign currency translation adjustments | 10,902 | (3,216) | 12,992 | 3,220 | ||||||
Other comprehensive income (loss) | 10,902 | (2,924) | 12,992 | 3,806 | ||||||
Total comprehensive income (loss) | $ 5,953 | $ (10,809) | $ (168) | $ (75,892) | ||||||
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Consolidated Condensed Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
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Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
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Statement of Comprehensive Income [Abstract] | |||
Tax expense for unrealized gain on interest rate swap agreements | $ 184 | $ 365 |
Organization, Description of Business, and Basis of Presentation |
6 Months Ended |
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Jul. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Description of Business, and Basis of Presentation | Organization, Description of Business, and Basis of Presentation We are a provider of liquid and solid containment solutions, operating within a specialty sector of the broader industrial services industry. Our revenue is generated by providing rental equipment, customized solutions, and services to our customers. We provide a wide variety of steel and polyethylene temporary storage tanks, roll-off containers, pumps, filtration, pipes, hoses and fittings, shoring, and related products to a broad range of customers for a number of applications. Tank and roll-off container applications include the storage of water, chemicals, waste streams, and solid waste. Pump applications include the pumping of groundwater, municipal waste, and other fluids. Filtration applications include the separation of various solids from liquids. We serve a variety of industries, including industrial and environmental remediation, refining, environmental services, construction, chemicals, transportation, power, municipal works, and oil and gas. We have branches within 23 states in the United States as well as branches in Canada, France, Germany, the Netherlands and the United Kingdom. As used herein, the terms “Company,” “we,” “us,” and “our” refer to BakerCorp International, Inc. and its subsidiaries, unless the context indicates to the contrary. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended January 31, 2017, included in our 2017 Annual Report on Form 10-K filed with the SEC on April 26, 2017. Certain amounts previously reported have been reclassified to conform to the current year financial presentation. The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary for a fair statement of our results of operations and financial position for the interim periods. The results of operations for the three and six months ended July 31, 2017 are not necessarily indicative of the results to be expected for future quarters or the full year. Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions with our subsidiaries have been eliminated. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, judgments and assumptions including those related to revenue recognition, allowances for doubtful accounts, inventory valuation, customer rebates, sales returns and allowances, medical insurance claims, litigation accruals, impairment of long-lived assets, intangible assets and goodwill, depreciation and amortization, contingencies, income taxes, share-based compensation (expense and liability), and derivatives. Our estimates, judgments, and assumptions are based on historical experience, future expectations, and other factors which we believe to be reasonable. Actual results could materially differ from those estimates. |
Accounting Pronouncements |
6 Months Ended |
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Jul. 31, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Pronouncements | Accounting Pronouncements Recently Issued Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation-Stock Compensation (Topic 718)”. The guidance clarifies how an entity should account for effects of a modification of a share-based payment. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017. We are currently assessing the impact the adoption of ASU No. 2017-09 will have on our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 23), Restricted Cash". The guidance will require restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our condensed consolidated financial statements based upon our current procedures for tracking restricted cash and cash equivalents. In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets other than Inventory". The guidance will require companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. The new guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. The guidance requires modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our condensed consolidated financial statements based upon our current procedures for tracking the transfer and sale of intra-entity assets. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flow (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU No. 2016-15”). ASU No. 2016-15 clarifies the guidance in ASC 230 on the classification of certain cash receipts and payments in the statement of cash flows. The standard is effective for non-public entities for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2016-15 will have on our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): “Improvements to Employee Share-Based Payment Accounting” (“ASU No. 2016-09”). ASU No. 2016-09 simplifies several aspects of the accounting for share-based payments transactions, including income tax consequences, classification of awards as either liability or equity, and classification on the statement of cash flows. The standard is effective for non-public entities for annual periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2016-09 will have on our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). This amendment requires the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases” and increases the disclosure requirements surrounding these leases. For non-public business entities, ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2016-02 will have on our condensed consolidated financial statements. During May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU No. 2014-09”). ASU No. 2014-09 will require companies to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU No. 2014-09 creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. ASU No. 2014-09 allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements. A decision about which method to use will affect a company’s implementation plans. The standard and multiple clarifying standard updates are effective for non-public entities for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2014-09 will have on our condensed consolidated financial statements. |
Changes in Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss | Changes in Accumulated Other Comprehensive Loss The following table includes the change in foreign currency translation adjustments to the components of accumulated other comprehensive loss, for the three months ended July 31, 2017:
The following table includes the components of accumulated other comprehensive loss, net of tax, for the three months ended July 31, 2016:
The following table includes the change in foreign currency translation adjustments to the components of accumulated other comprehensive loss, for the six months ended July 31, 2017:
The following table includes the components of accumulated other comprehensive loss, net of tax, for the six months ended July 31, 2016:
(1) Unrealized income on interest rate swap agreements is net of tax expense of $365 for the six months ended July 31, 2016. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories Inventories, net consisted of the following:
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Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net consisted of the following as of July 31, 2017:
Property and equipment, net consisted of the following as of January 31, 2017:
We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related carrying value of the asset to its estimated fair value. During the three months ended April 30, 2017 and July 31, 2017, certain assets that were on long-term rentals were returned in a condition beyond repair. We determined that the net book value of these assets exceeded the assets’ estimated fair value. The fair value was determined utilizing the discounted cash flow method income approach (a non-recurring Level 3 fair value measurement). As a result, during the three months ended April 30, 2017 and July 31, 2017, we recorded an impairment charge of $0.2 million and $0.1 million, respectively, resulting in a $0.3 million impairment charge in our North American segment during the six months ended July 31, 2017. During the three months ended July 31, 2016, certain assets that were on long-term rentals were returned in a condition beyond repair. We determined that the net book value of these assets exceeded the assets’ estimated fair value. As a result, during the three and six months ended July 31, 2016, we recorded an impairment charge of $0.4 million in our North American segment. Included in machinery and equipment are assets under capital leases with a cost of $5.1 million and $4.7 million as of July 31, 2017 and January 31, 2017, respectively, and accumulated depreciation of $1.6 million and $1.2 million as of July 31, 2017 and January 31, 2017, respectively. Depreciation expense related to property and equipment for the three months ended July 31, 2017 and 2016 was $10.7 million and $11.0 million, respectively. Depreciation and amortization expense related to property and equipment for the six months ended July 31, 2017 and 2016 was $21.4 million and $22.1 million, respectively. |
Goodwill and Other Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net Goodwill Changes in the carrying amount of the European reporting unit goodwill was as follows:
For the six months ended July 31, 2017 We evaluate the carrying value of goodwill annually during the fourth quarter of each fiscal year and more frequently if we believe indicators of impairment exist. We elected to early adopt ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350)-Simplifying the Test for Goodwill Impairment” (“ASU No. 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment. The standard removes Step 2 of the goodwill impairment test. Instead we perform our annual, or interim goodwill impairment test by comparing the estimated fair value of a reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount. We will record an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. We estimate the fair value of our reporting units based on income and market approaches. The North American goodwill was written down to zero as of January 31, 2017 and there were no indicators of impairment to our European reporting unit as of July 31, 2017. For the six months ended July 31, 2016 During the quarter ended April 30, 2016, we encountered a reduction in our operating results in comparison to our forecast, primarily due to greater weakness in upstream oil and gas than anticipated, slower recovery in our construction business, and the delay of capital projects by refinery and power plants which can be seen through our lower volume of work with industrial service customers. As a result of the decline in demand for our products and services, we re-assessed our revenue and EBITDA forecast beginning with the fiscal year ended January 31, 2017 using a bottoms-up approach, having conversations with our key customers, and performing an analysis on current market conditions and industry spending behavior. Based on our assessment, we noted that despite the recent stabilization of oil prices, there will be continued uncertainty in the energy market resulting in a slow-down in capital spend. As a result, we updated our projections to reflect the decline in activity, adjusted our forecast for the outer years to maintain similar growth rates as our previous forecast, and performed the first step of the goodwill impairment test. Under the first step of the impairment test, we determined the carrying value of the North American reporting unit exceeded fair value. We then performed the second step of the impairment test for the North American reporting unit and calculated the implied fair value of goodwill, which was less than its carrying value. Based on our analysis, we recorded a non-cash goodwill impairment charge of $65.7 million in our North American reporting unit. This impairment charge, which is included under the caption “Impairment of goodwill and other intangible assets” in our condensed consolidated statements of operations for the six months ended July 31, 2016, did not impact our operations, compliance with our debt covenants or our cash flows. For the European reporting unit, the fair value exceeded the carrying value, suggesting no indication of potential goodwill impairment. In calculating the fair value of our North American reporting unit under the first step, we gave equal weight to the income approach, which analyzed projected discounted cash flows, and the market approach, which considered comparable public companies as well as comparable industry transactions. Under the income approach, we estimate future capital expenditures required to maintain our rental fleet under normalized operations and utilize the following Level 3 estimates and assumptions in the discounted cash flow analysis:
Under the market approach, we used other significant observable market inputs including various peer company comparisons and industry transaction data, which resulted in revenue and EBITDA market multiples of 1.75x to 2.00x and 6.00x to 7.50x, respectively. In evaluating our market multiples, we placed higher consideration on peer companies that were experiencing similar oil and gas pressures. Changes in the estimates utilized under the income and market approaches could materially affect the determination of fair value and the conclusions of the step one analysis for the reporting unit. Other Intangible Assets, Net The components of other intangible assets, net were the following as of:
We evaluate the carrying value of our indefinite-lived intangible asset (trade name) annually during the fourth quarter of each fiscal year and more frequently if we believe indicators of impairment exist. To test our indefinite-lived intangible asset for impairment, we compare the fair value of our indefinite-lived intangible asset to carrying value. We estimate the fair value using an income approach and using the asset’s projected discounted cash flows. We recognize an impairment loss when the estimated fair value of the indefinite-lived intangible asset is less than the carrying value. We assess the impairment of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The asset is impaired if its carrying value exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset. In assessing recoverability, we must make assumptions regarding estimated future cash flows and other factors. The impairment loss is the amount by which the carrying value of the asset exceeds its fair value. We estimate fair value utilizing the projected discounted cash flow method and a discount rate determined by our management to be commensurate with the risk inherent in our current business model. When calculating fair value, we must make assumptions regarding estimated future cash flows, discount rates and other factors. During the three months ended July 31, 2017, an indicator of impairment to our indefinite-lived intangible asset (trade name) was identified in our North American reporting unit due to a reduction in our forecast due to a slower than expected recovery in our maintenance and oil and gas customers. Based on our analysis, we concluded that the carrying value of our trade name indefinite-lived intangible asset exceeded its fair value and we recorded an impairment charge of $1.0 million. Due to certain indicators of impairment identified during our April 30, 2016 interim impairment test of goodwill, we assessed our indefinite and definite-lived intangible assets for impairment. Based on our analysis, we concluded that the carrying value of our indefinite-lived intangible asset (trade name) exceeded its fair value and recorded an impairment charge of $18.3 million in our North American reporting unit. This impairment charge, which is included under the caption “Impairment of goodwill and other intangible assets” in our condensed consolidated statements of operations for the six months ended July 31, 2016, does not impact our operations, compliance with our debt covenants or our cash flows. We estimated the fair value of our trade name using the relief-from-royalty method, which uses several significant assumptions, including an estimate of useful life and revenue projections that consider historical and estimated future results, general economic and market conditions, as well as the impact of planned business and operational strategies. The following estimates and assumptions were also used in the relief-from-royalty method:
As of July 31, 2017 there was no impairment recorded of our definite-lived intangible assets. Amortization expense related to intangible assets for the three months ended July 31, 2017 and 2016 was $4.1 million and $4.0 million, respectively. Amortization expense related to intangible assets for the six months ended July 31, 2017 and 2016 was $8.1 million for each of the six months ended July 31, 2017 and 2016, respectively. Estimated amortization expense for the fiscal periods ending January 31 is as follows:
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Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses consists of the following as of:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt consists of the following:
On June 1, 2011, we (i) entered into a $435.0 million senior secured credit facility (the “Credit Facility”), consisting of a $390.0 million term loan facility (the “Senior Term Loan”) and a $45.0 million revolving credit facility (the “Revolving Credit Facility”) and (ii) issued $240.0 million in aggregate principal amount of senior unsecured notes due 2019 (the “Notes”). Credit Facility On February 7, 2013, we entered into a first amendment to refinance our Credit Facility (the “First Amendment”), to refinance a like amount of term loans (the “Original Term Loan”) under the Credit Facility. Borrowings under the Credit Facility bear interest at a rate equal to LIBOR plus an applicable margin, subject to a LIBOR floor of 1.25%. The LIBOR margin applicable to the Amended Senior Term Loan is 3.00%, which is 0.75% less than the LIBOR margin applicable to the Original Term Loan. In addition, pursuant to the First Amendment, among other things, (i) the Senior Term Loan maturity date was extended to February 7, 2020, provided that the maturity will be March 2, 2019 if the Amended Senior Term Loan is not repaid or refinanced on or prior to March 2, 2019, (ii) the Revolving Credit Facility maturity date was extended to February 7, 2018, and (iii) we obtained increased flexibility with respect to certain covenants and restrictions relating to our ability to incur additional debt, make investments, debt prepayments, and acquisitions. Principal on the Senior Term Loan is payable in quarterly installments of $1.0 million. Furthermore, the excess cash flow prepayment requirement is in effect until the maturity date. On November 13, 2013, we entered into a second amendment to our Credit Facility (the “Second Amendment”). Pursuant to the Second Amendment, the Company borrowed $35.0 million of incremental term loans (the “Incremental Term Loan”), which may be used for general corporate purposes, including to finance permitted acquisitions. The terms applicable to the Incremental Term Loans are the same as those applicable to the term loans under the Credit Facility. On November 3, 2016, we entered into a third amendment to our Credit Facility (the “Third Amendment”) to amend the Revolving Credit Facility. The amendment (i) extends the Revolving Credit Facility maturity date from February 7, 2018 to November 7, 2019 (provided that such maturity date will be accelerated to January 30, 2019 unless the Company’s senior notes are repaid in full or extended or refinanced on or prior to January 30, 2019) and (ii) reduces the revolver commitment from $45.0 million to $40.0 million in addition to certain other amendments to the original terms. The Credit Facility, as amended, in February 2013, November 2013 and November 2016, places certain limitations on our (and all of our U.S. subsidiaries’) ability to incur additional indebtedness, pay dividends or make other distributions, repurchase capital stock, make certain investments, enter into certain types of transactions with affiliates, utilize assets as security in other transactions, and sell certain assets or merge with or into other companies. In addition, we may be required to satisfy and maintain a total leverage ratio if there is an outstanding balance on the Revolving Credit Facility of 25% or more of the committed amount on any quarter end. The Third Amendment was accounted for as a debt modification. Costs incurred in connection with the Third Amendment are being deferred and amortized over the term of the amended Revolving Credit Facility. In addition, any unamortized deferred costs related to the old arrangement were written off in proportion to the decrease in borrowing capacity. During the fiscal year ended January 31, 2017, we recorded $0.5 million of deferred costs related to the Third Amendment. As of July 31, 2017, we did not have an outstanding balance on the revolving loan; and therefore, we were not subject to a leverage test. Additionally, as of July 31, 2017, we were in compliance with all of our requirements and covenant tests under the Credit Facility, as amended. Senior Unsecured Notes Due 2019 On June 1, 2011, we issued $240.0 million of fixed rate 8.25% notes due June 1, 2019. We may redeem all or any portion of the Notes at the redemption prices set forth in the applicable indenture, plus accrued and unpaid interest. Upon a change of control, we are required to make an offer to redeem all of the Notes from the holders at a redemption price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of the repurchase. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our direct and indirect existing and future wholly-owned domestic restricted subsidiaries. Interest and Fees Costs related to debt financing are deferred and amortized to interest expense over the term of the underlying debt instruments utilizing the straight-line method for our revolving credit facility and the effective interest method for our senior term and incremental term loan facilities. As of July 31, 2017 and January 31, 2017, deferred financing costs of $6.6 million and $7.3 million, respectively, are reflected as a reduction of the underlying debt. We amortized $0.8 million and $0.7 million of deferred financing costs during the three months ended July 31, 2017 and 2016, respectively. We amortized $1.5 million and $1.4 million of deferred financing costs during the six months ended July 31, 2017 and 2016, respectively. Interest and fees related to our Credit Facility and the Notes are as follows:
(1) Interest on the Amended Term Loan is payable quarterly based upon an interest rate of 4.25%. (2) Interest on the Notes is payable semi-annually based upon a fixed annual rate of 8.25%. Principal Payments on Debt As of July 31, 2017, the schedule of minimum required principal payments on our debt for each of the fiscal years ending January 31 are due according to the table below:
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax benefit for the three and six months ended July 31, 2017 and 2016 is based on the estimated effective tax rate for the entire fiscal year. The estimated effective tax rate is subject to adjustment in subsequent quarterly periods as our estimates of pre-tax income and loss for the year fluctuate, including changes in the geographic mix of pre-tax income and loss. The effective income tax rates for the three and six months ended July 31, 2017 were a benefit of 36.0% and 36.6%, respectively compared to a benefit for the three and six months ended July 31, 2016 of 22.2% and 22.5%, respectively. The effective tax rate differ from the U.S. federal statutory rate primarily due to income taxed in foreign jurisdictions, state taxes, non-deductible meals and entertainment expenses, non-deductible goodwill impairment, and discrete items. The difference in effective income tax rates for the six months ended July 31, 2017 and 2016 primarily relates to a change in the estimated forecast of pre-tax book income and loss for each respective jurisdiction, which includes an impairment of non-deductible goodwill recorded during the six months ended July 31, 2016. Discrete items related primarily to excess shortfalls associated with the cancellation and expiration of stock options recorded during the six months ended July 31, 2017. Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. A valuation allowance is recorded for deferred income tax assets when management determines it is more likely than not that such assets will not be realized. Our deferred tax assets primarily relate to federal net operating loss carry-forwards. Management believes we will realize the benefit of existing deferred tax assets based on the scheduled reversal of U.S. deferred tax liabilities, related to depreciation and amortization expenses not deductible for tax purposes, which is ordinary income and therefore of the same character as the temporary differences giving rise to the deferred tax assets. This reversal will occur in substantially similar time periods and in the same jurisdictions as the deferred tax assets. As such, the deferred tax liabilities are considered a source of income sufficient to support our U.S. deferred tax assets; therefore, a valuation allowance is not required as of July 31, 2017. We recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Tax benefits recognized from such a position are measured based on whether the benefit has a greater than 50% likelihood of being realized upon ultimate resolution. It is reasonably possible that an additional $0.9 million of uncertain tax positions will decrease within the next 12 months due to the expiration of the net operating loss carryforwards associated with such positions. We believe our income tax contingencies are adequate for all outstanding issues in all jurisdictions and all open years. However, due to the risk that audit outcomes and the timing of audit settlements are subject to significant uncertainty and as we continue to evaluate such uncertainties in light of current facts and circumstances, our current estimate of the total amounts of unrecognized tax benefits could increase or decrease for all open tax years. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholder's Equity | Shareholder’s Equity Share-Based Compensation During June 2011, BCI Holdings adopted a share-based compensation plan, The BakerCorp International Holdings, Inc. 2011 Equity Incentive Plan (the “2011Plan”). Subsequent to the adoption of the 2011 Plan, on September 12, 2013, the BCI Holdings’ Board of Directors amended the 2011 Plan by resolution to increase the number of shares of BCI Holdings common stock authorized for issuance under the 2011 Plan to 1,001,339 shares. As of July 31, 2017, there were 260,170 shares available for grant. The amended 2011 Plan permits the granting of BCI Holdings stock options, nonqualified stock options and restricted stock to eligible employees and non-employee directors and consultants. The following table summarizes stock option activity during the six months ended July 31, 2017:
As of July 31, 2017, there was $16.5 million of unrecognized pre-tax share-based compensation expense related to non-vested stock options of which $0.6 million we expect to recognize over a weighted average period of 0.7 years. We expect to recognize the remaining $15.9 million, which includes $8.1 million of unrecognized share-based compensation expense for the CEO’s options, upon a Change in Control or initial public offering (“IPO”) as defined in the 2011 Plan. During the six months ended July 31, 2017, we did not recognize any share-based compensation expense related to the CEO’s options. No options vested during the three and six months ended July 31, 2017. The total fair value of options vested during the three and six months ended July 31, 2016 was zero and $0.1 million, respectively. The share-based compensation expense included within employee related expenses in our condensed consolidated statement of operations was the following:
The fair value of BCI Holdings stock options issued and classified as equity awards was determined using the Black-Scholes options pricing model utilizing the following weighted-average assumptions for each respective period:
Liability Awards We account for certain option awards as liability awards, as we determined cash settlement upon exercise is probable. The expiration of certain options classified as liability awards resulted in a decrease to non-cash share-based compensation expense of $0.03 million during the six months ended July 31, 2017. We remeasured the fair value of these options during the fiscal year ended January 31, 2017, resulting in a decrease to our non-cash share-based compensation expense of $0.7 million. As of July 31, 2017 and January 31, 2017 the fair value of our share-based compensation liability awards totaled $35,000 and $66,000, respectively. Our share-based compensation liability is fair valued using level 3 inputs which are based on internal valuations and considering input from third parties and utilizing the following assumptions:
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting We conduct our operations through entities located in the United States, Canada, France, Germany, the United Kingdom and the Netherlands. We transact business using the local currency within each country where we perform the service or provide the rental equipment. Our operating and reportable segments are North America and Europe. Within each operating segment, there are common customers, common pricing structures, the ability and history of sharing equipment and resources, operational compatibility, commonality among regulatory environments, and relative geographic proximity. Our operating segments consist of the following:
Selected statement of operations information for our reportable segments are the following:
Total assets and property and equipment, net information by reportable segment consists of the following:
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Related Party Transactions |
6 Months Ended |
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Jul. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions From time to time, we enter into transactions in the normal course of business with related parties. The accounting policies that we apply to our transactions with related parties are consistent with those applied in transactions with independent third parties. Pursuant to a professional services agreement between us and Permira Advisers L.L.C. (the “Sponsor”), we agreed to pay the Sponsor an annual management fee of $0.5 million, payable quarterly, plus reasonable out-of-pocket expenses, in connection with the planning, strategy, and oversight support provided to management. We recorded $0.1 million for each of three months ended July 31, 2017 and 2016, and $0.3 million for each of the six months ended July 31, 2017 and 2016 in aggregate management fees and expenses to the Sponsor. Management fees payable to the Sponsor totaled $0.04 million as of July 31, 2017 and January 31, 2017. Management fees are included in professional fees in the condensed consolidated statement of operations. |
Commitments and Contingencies |
6 Months Ended |
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Jul. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation We are involved in various legal actions arising in the ordinary course of conducting our business. These include claims relating to (i) personal injury or property damage involving equipment rented or sold by us, (ii) motor vehicle accidents involving our vehicles and our employees, (iii) employment-related matters, and (iv) environmental matters. We do not believe that the ultimate disposition of these matters will have a material adverse effect on our condensed consolidated financial position, results of operations, or cash flow. We expense legal fees in the period in which they are incurred. |
Condensed Consolidating Financial Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Our Notes are guaranteed by all of our U.S. subsidiaries (the “guarantor subsidiaries”). This indebtedness is not guaranteed by BCI Holdings or our foreign subsidiaries (together, the “non-guarantor subsidiaries”). The guarantor subsidiaries are all one hundred percent owned, and the guarantees are made on a joint and several basis and are full and unconditional (subject to subordination provisions and subject to customary release provisions and a standard limitation, which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws). The following condensed consolidating financial information presents the financial position, results of operations, and cash flows of the parent, guarantors, and non-guarantor subsidiaries of the Company and the eliminations necessary to arrive at the information on a consolidated basis for the periods indicated. The parent referenced in the condensed consolidating financial statements is BakerCorp International, Inc., the issuer. We conduct substantially all of our business through our subsidiaries. To make the required payments on our Notes and other indebtedness, and to satisfy other liquidity requirements, we will rely, in large part, on cash flows from these subsidiaries, mainly in the form of dividends, royalties, and advances, or payments of intercompany loan arrangements. The ability of these subsidiaries to make dividend payments to us will be affected by, among other factors, the obligations of these entities to their creditors, requirements of corporate and other law, and restrictions contained in agreements entered into by or relating to these entities. The parent and the guarantor subsidiaries have each reflected investments in their respective subsidiaries under the equity method of accounting. There are no restrictions limiting the transfer of cash from guarantor subsidiaries and non-guarantor subsidiaries to the parent. Condensed Consolidating Balance Sheet July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Balance Sheet January 31, 2017 (In thousands)
Condensed Consolidating Statement of Operations For the Three Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Operations For the Three Months Ended July 31, 2016 (unaudited) (In thousands)
Condensed Consolidating Statement of Operations For the Six Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Operations For the Six Months Ended July 31, 2016 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Three Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Three Months Ended July 31, 2016 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Six Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Six Months Ended July 31, 2016 (unaudited) (In thousands)
Condensed Consolidating Statement of Cash Flows For the Six Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Cash Flows For the Six Months Ended July 31, 2016 (unaudited) (In thousands)
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Organization, Description of Business, and Basis of Presentation (Policies) |
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Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended January 31, 2017, included in our 2017 Annual Report on Form 10-K filed with the SEC on April 26, 2017. Certain amounts previously reported have been reclassified to conform to the current year financial presentation. The interim condensed consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary for a fair statement of our results of operations and financial position for the interim periods. The results of operations for the three and six months ended July 31, 2017 are not necessarily indicative of the results to be expected for future quarters or the full year. |
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Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions with our subsidiaries have been eliminated. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, judgments and assumptions including those related to revenue recognition, allowances for doubtful accounts, inventory valuation, customer rebates, sales returns and allowances, medical insurance claims, litigation accruals, impairment of long-lived assets, intangible assets and goodwill, depreciation and amortization, contingencies, income taxes, share-based compensation (expense and liability), and derivatives. Our estimates, judgments, and assumptions are based on historical experience, future expectations, and other factors which we believe to be reasonable. Actual results could materially differ from those estimates. |
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Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, “Compensation-Stock Compensation (Topic 718)”. The guidance clarifies how an entity should account for effects of a modification of a share-based payment. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017. We are currently assessing the impact the adoption of ASU No. 2017-09 will have on our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 23), Restricted Cash". The guidance will require restricted cash and cash equivalents to be included with cash and cash equivalents on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our condensed consolidated financial statements based upon our current procedures for tracking restricted cash and cash equivalents. In October 2016, the FASB issued ASU No. 2016-16, "Intra-Entity Transfers of Assets other than Inventory". The guidance will require companies to recognize the income tax effects of intra-entity sales and transfers of assets other than inventory in the period in which the transfer occurs. The new guidance will be effective for fiscal years and interim periods beginning after December 15, 2017 and early adoption is permitted. The guidance requires modified retrospective adoption. We expect to adopt this guidance when effective, and do not expect the guidance to have a significant impact on our condensed consolidated financial statements based upon our current procedures for tracking the transfer and sale of intra-entity assets. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flow (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU No. 2016-15”). ASU No. 2016-15 clarifies the guidance in ASC 230 on the classification of certain cash receipts and payments in the statement of cash flows. The standard is effective for non-public entities for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2016-15 will have on our condensed consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): “Improvements to Employee Share-Based Payment Accounting” (“ASU No. 2016-09”). ASU No. 2016-09 simplifies several aspects of the accounting for share-based payments transactions, including income tax consequences, classification of awards as either liability or equity, and classification on the statement of cash flows. The standard is effective for non-public entities for annual periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2016-09 will have on our condensed consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU No. 2016-02”). This amendment requires the recognition of lease assets and lease liabilities on the balance sheet by lessees for those leases currently classified as operating leases under ASC 840 “Leases” and increases the disclosure requirements surrounding these leases. For non-public business entities, ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2016-02 will have on our condensed consolidated financial statements. During May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU No. 2014-09”). ASU No. 2014-09 will require companies to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU No. 2014-09 creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. ASU No. 2014-09 allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements. A decision about which method to use will affect a company’s implementation plans. The standard and multiple clarifying standard updates are effective for non-public entities for annual periods beginning after December 15, 2018 and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. We are currently assessing the impact the adoption of ASU No. 2014-09 will have on our condensed consolidated financial statements. |
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Impairment or Disposal of Long-Lived Assets | We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) are less than the carrying value, a write-down would be recorded to reduce the related carrying value of the asset to its estimated fair value. |
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Goodwill and Intangible Assets, Goodwill | We evaluate the carrying value of goodwill annually during the fourth quarter of each fiscal year and more frequently if we believe indicators of impairment exist. We elected to early adopt ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350)-Simplifying the Test for Goodwill Impairment” (“ASU No. 2017-04”). ASU 2017-04 simplifies the accounting for goodwill impairment. The standard removes Step 2 of the goodwill impairment test. Instead we perform our annual, or interim goodwill impairment test by comparing the estimated fair value of a reporting unit to which the goodwill is assigned to the reporting unit’s carrying amount. We will record an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. We estimate the fair value of our reporting units based on income and market approaches. |
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Goodwill and Intangible Assets, Intangible Assets | We evaluate the carrying value of our indefinite-lived intangible asset (trade name) annually during the fourth quarter of each fiscal year and more frequently if we believe indicators of impairment exist. To test our indefinite-lived intangible asset for impairment, we compare the fair value of our indefinite-lived intangible asset to carrying value. We estimate the fair value using an income approach and using the asset’s projected discounted cash flows. We recognize an impairment loss when the estimated fair value of the indefinite-lived intangible asset is less than the carrying value. We assess the impairment of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The asset is impaired if its carrying value exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset. In assessing recoverability, we must make assumptions regarding estimated future cash flows and other factors. The impairment loss is the amount by which the carrying value of the asset exceeds its fair value. We estimate fair value utilizing the projected discounted cash flow method and a discount rate determined by our management to be commensurate with the risk inherent in our current business model. When calculating fair value, we must make assumptions regarding estimated future cash flows, discount rates and other factors. |
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Debt | Costs related to debt financing are deferred and amortized to interest expense over the term of the underlying debt instruments utilizing the straight-line method for our revolving credit facility and the effective interest method for our senior term and incremental term loan facilities. |
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Income Taxes | The income tax benefit for the three and six months ended July 31, 2017 and 2016 is based on the estimated effective tax rate for the entire fiscal year. The estimated effective tax rate is subject to adjustment in subsequent quarterly periods as our estimates of pre-tax income and loss for the year fluctuate, including changes in the geographic mix of pre-tax income and loss. |
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Income Tax Uncertainties | We recognize a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Tax benefits recognized from such a position are measured based on whether the benefit has a greater than 50% likelihood of being realized upon ultimate resolution. It is reasonably possible that an additional $0.9 million of uncertain tax positions will decrease within the next 12 months due to the expiration of the net operating loss carryforwards associated with such positions. |
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Segment Reporting | Our operating and reportable segments are North America and Europe. Within each operating segment, there are common customers, common pricing structures, the ability and history of sharing equipment and resources, operational compatibility, commonality among regulatory environments, and relative geographic proximity. Our operating segments consist of the following:
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Deferred income taxes | |||||||||
Income Taxes | Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. A valuation allowance is recorded for deferred income tax assets when management determines it is more likely than not that such assets will not be realized. Our deferred tax assets primarily relate to federal net operating loss carry-forwards. Management believes we will realize the benefit of existing deferred tax assets based on the scheduled reversal of U.S. deferred tax liabilities, related to depreciation and amortization expenses not deductible for tax purposes, which is ordinary income and therefore of the same character as the temporary differences giving rise to the deferred tax assets. This reversal will occur in substantially similar time periods and in the same jurisdictions as the deferred tax assets. As such, the deferred tax liabilities are considered a source of income sufficient to support our U.S. deferred tax assets; therefore, a valuation allowance is not required as of July 31, 2017. |
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Share-based compensation liability | |||||||||
Compensation Related Costs | We account for certain option awards as liability awards, as we determined cash settlement upon exercise is probable. |
Changes in Accumulated Other Comprehensive Loss (Tables) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss, Net of Taxes | The following table includes the change in foreign currency translation adjustments to the components of accumulated other comprehensive loss, for the three months ended July 31, 2017:
The following table includes the components of accumulated other comprehensive loss, net of tax, for the three months ended July 31, 2016:
The following table includes the change in foreign currency translation adjustments to the components of accumulated other comprehensive loss, for the six months ended July 31, 2017:
The following table includes the components of accumulated other comprehensive loss, net of tax, for the six months ended July 31, 2016:
(1) Unrealized income on interest rate swap agreements is net of tax expense of $365 for the six months ended July 31, 2016. |
Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories, net consisted of the following:
|
Property and Equipment, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Property and equipment, net consisted of the following as of July 31, 2017:
Property and equipment, net consisted of the following as of January 31, 2017:
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Goodwill and Other Intangible Assets, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Carrying Amount of Goodwill | Changes in the carrying amount of the European reporting unit goodwill was as follows:
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Components of Other Intangible Assets | The components of other intangible assets, net were the following as of:
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Estimated Amortization Expense | Estimated amortization expense for the fiscal periods ending January 31 is as follows:
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Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued expenses consists of the following as of:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Debt consists of the following:
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Principal Payments on Long Term Debt | As of July 31, 2017, the schedule of minimum required principal payments on our debt for each of the fiscal years ending January 31 are due according to the table below:
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Debt | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and Fees Related to Credit Facility and Senior Unsecured Notes | Interest and fees related to our Credit Facility and the Notes are as follows:
(1) Interest on the Amended Term Loan is payable quarterly based upon an interest rate of 4.25%. (2) Interest on the Notes is payable semi-annually based upon a fixed annual rate of 8.25%. |
Shareholder's Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | The following table summarizes stock option activity during the six months ended July 31, 2017:
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Non-Cash Share-Based Compensation | The share-based compensation expense included within employee related expenses in our condensed consolidated statement of operations was the following:
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Schedule of Share Based Payment Award, Stock Options, Valuation Assumptions | The fair value of BCI Holdings stock options issued and classified as equity awards was determined using the Black-Scholes options pricing model utilizing the following weighted-average assumptions for each respective period:
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Share-based compensation liability | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Based Payment Award, Stock Options, Valuation Assumptions | ur share-based compensation liability is fair valued using level 3 inputs which are based on internal valuations and considering input from third parties and utilizing the following assumptions:
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Segment Reporting (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jul. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Selected statement of operations information for our reportable segments are the following:
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Long-lived Assets by Geographic Areas | Total assets and property and equipment, net information by reportable segment consists of the following:
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Condensed Consolidating Financial Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Balance Sheet January 31, 2017 (In thousands)
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Condensed Consolidating Statements of Operations | Condensed Consolidating Statement of Operations For the Three Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Operations For the Three Months Ended July 31, 2016 (unaudited) (In thousands)
Condensed Consolidating Statement of Operations For the Six Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Operations For the Six Months Ended July 31, 2016 (unaudited) (In thousands)
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Condensed Consolidating Statements of Comprehensive (Loss) Income | Condensed Consolidating Statement of Comprehensive (Loss) Income For the Three Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Three Months Ended July 31, 2016 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Six Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Comprehensive (Loss) Income For the Six Months Ended July 31, 2016 (unaudited) (In thousands)
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Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statement of Cash Flows For the Six Months Ended July 31, 2017 (unaudited) (In thousands)
Condensed Consolidating Statement of Cash Flows For the Six Months Ended July 31, 2016 (unaudited) (In thousands)
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Organization, Description of Business and Basis of Presentation (Details) |
Jul. 31, 2017
State
|
---|---|
United States | |
Organization Description of Business and Basis of Presentation | |
Number of states with branch locations | 23 |
Inventories (Details) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Components | $ 1,279 | $ 1,237 |
Work-in-process | 189 | 627 |
Finished goods | 3,484 | 2,845 |
Less: inventory reserve | (982) | (988) |
Inventories, net | $ 3,970 | $ 3,721 |
Property and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 31, 2017 |
Apr. 30, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
Jan. 31, 2017 |
|
Property, Plant and Equipment [Line Items] | ||||||
Impairment of long-lived assets | $ 96 | $ 439 | $ 296 | $ 439 | ||
Depreciation and amortization related to property and equipment | 10,700 | $ 11,000 | 21,400 | 22,100 | ||
North America | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Impairment of long-lived assets | 96 | $ 200 | 300 | $ 400 | ||
Assets held for use: | Machinery and equipment | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Assets under capital leases, cost | 5,100 | 5,100 | $ 4,700 | |||
Assets under capital leases, accumulated depreciation | $ 1,600 | $ 1,600 | $ 1,200 |
Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Cost | $ 546,291 | $ 532,652 |
Accumulated Depreciation | (225,796) | (211,945) |
Net Carrying Amount | 320,495 | 320,707 |
Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 474,500 | 461,872 |
Accumulated Depreciation | (176,894) | (167,305) |
Net Carrying Amount | 297,606 | 294,567 |
Assets held for use: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 71,791 | 70,780 |
Accumulated Depreciation | (48,902) | (44,640) |
Net Carrying Amount | 22,889 | 26,140 |
Spill protection berms | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 3,514 | 3,487 |
Accumulated Depreciation | (2,530) | (2,497) |
Net Carrying Amount | 984 | 990 |
Boxes | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 31,857 | 31,128 |
Accumulated Depreciation | (15,581) | (14,357) |
Net Carrying Amount | 16,276 | 16,771 |
Filtration | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 15,013 | 14,303 |
Accumulated Depreciation | (7,824) | (6,820) |
Net Carrying Amount | 7,189 | 7,483 |
Generators and light towers | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 513 | 518 |
Accumulated Depreciation | (245) | (235) |
Net Carrying Amount | 268 | 283 |
Pipes, hoses and fittings | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 8,467 | 11,196 |
Accumulated Depreciation | (5,946) | (8,479) |
Net Carrying Amount | 2,521 | 2,717 |
Non-steel containment | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 11,766 | 10,309 |
Accumulated Depreciation | (5,302) | (5,031) |
Net Carrying Amount | 6,464 | 5,278 |
Pumps | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 62,828 | 58,021 |
Accumulated Depreciation | (38,903) | (35,761) |
Net Carrying Amount | 23,925 | 22,260 |
Shoring | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 5,682 | 4,681 |
Accumulated Depreciation | (3,895) | (3,444) |
Net Carrying Amount | 1,787 | 1,237 |
Steel containment | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 329,364 | 324,267 |
Accumulated Depreciation | (94,939) | (88,996) |
Net Carrying Amount | 234,425 | 235,271 |
Tank trailers | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,870 | 1,881 |
Accumulated Depreciation | (1,729) | (1,685) |
Net Carrying Amount | 141 | 196 |
Construction in progress | Assets held for rent: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 3,626 | 2,081 |
Accumulated Depreciation | 0 | 0 |
Net Carrying Amount | 3,626 | 2,081 |
Construction in progress | Assets held for use: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 780 | 2,626 |
Accumulated Depreciation | 0 | 0 |
Net Carrying Amount | 780 | 2,626 |
Leasehold improvements | Assets held for use: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 4,415 | 3,949 |
Accumulated Depreciation | (2,800) | (2,572) |
Net Carrying Amount | 1,615 | 1,377 |
Machinery and equipment | Assets held for use: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 45,983 | 44,379 |
Accumulated Depreciation | (32,042) | (29,673) |
Net Carrying Amount | 13,941 | 14,706 |
Office furniture and equipment | Assets held for use: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 6,114 | 5,937 |
Accumulated Depreciation | (4,455) | (4,071) |
Net Carrying Amount | 1,659 | 1,866 |
Software | Assets held for use: | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 14,499 | 13,889 |
Accumulated Depreciation | (9,605) | (8,324) |
Net Carrying Amount | $ 4,894 | $ 5,565 |
Goodwill and Other Intangible Assets, Net - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Apr. 30, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
Jan. 31, 2017 |
|
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill | $ 54,836,000 | $ 54,836,000 | $ 49,918,000 | |||
Definite-lived intangible asset impairment charge | 0 | |||||
Amortization expense related to intangible assets | 4,100,000 | $ 4,000,000 | $ 8,100,000 | $ 8,100,000 | ||
Goodwill | Income Approach Valuation Technique | Level 3 | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Discount rate | 10.00% | |||||
Minimum | Goodwill | Income Approach Valuation Technique | Level 3 | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Long-term EBITDA margin | 25.80% | |||||
Long-term revenue growth rate | 3.00% | |||||
Minimum | Goodwill | Market Approach Valuation Technique | Level 3 | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Revenue market multiple | 1.75 | |||||
EBITDA market multiple | 6.00 | |||||
Maximum | Goodwill | Income Approach Valuation Technique | Level 3 | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Long-term EBITDA margin | 30.50% | |||||
Long-term revenue growth rate | 8.00% | |||||
Maximum | Goodwill | Market Approach Valuation Technique | Level 3 | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Revenue market multiple | 2.00 | |||||
EBITDA market multiple | 7.50 | |||||
North America | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill | $ 0 | |||||
Indefinite-lived intangible asset impairment charge | $ 1,000,000 | |||||
North America | Impairment of Goodwill and Other Intangible Assets | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Goodwill impairment charge | $ 65,700,000 | |||||
Indefinite-lived intangible asset impairment charge | $ 18,300,000 | |||||
North America | Indefinite-lived Intangible Assets | Income Approach Valuation Technique | Level 3 | ||||||
Schedule of Goodwill and Intangible Assets [Line Items] | ||||||
Royalty rate | 1.50% | |||||
Discount rate | 12.00% |
Goodwill and Other Intangible Assets, Net - Changes in the Carrying Amount of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jul. 31, 2017
USD ($)
| |
Goodwill [Line Items] | |
Beginning balance | $ 49,918 |
Ending balance | 54,836 |
Europe | |
Goodwill [Line Items] | |
Beginning balance | 49,918 |
Foreign currency translation | 4,918 |
Ending balance | $ 54,836 |
Goodwill and Other Intangible Assets, Net - Components of Other Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2017 |
Jan. 31, 2017 |
|||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Line Items] | |||||
Gross | $ 447,355 | $ 447,355 | $ 445,855 | ||
Accumulated Amortization | (99,948) | (99,948) | (91,437) | ||
Net | 347,407 | 347,407 | 354,418 | ||
Trade name (Indefinite) | |||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Line Items] | |||||
Gross | [1] | 43,341 | 43,341 | 43,566 | |
Accumulated Amortization | 0 | 0 | 0 | ||
Net | 43,341 | 43,341 | 43,566 | ||
Indefinite-lived intangible asset impairment charge | 1,000 | 18,300 | |||
Customer Relationships | |||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Line Items] | |||||
Gross | 402,157 | 402,157 | 400,455 | ||
Accumulated Amortization | (99,198) | (99,198) | (90,770) | ||
Net | 302,959 | $ 302,959 | 309,685 | ||
Useful life | 25 years | ||||
Customer Backlog | |||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Line Items] | |||||
Gross | 200 | $ 200 | 200 | ||
Accumulated Amortization | (200) | (200) | (200) | ||
Net | 0 | $ 0 | 0 | ||
Useful life | 2 years | ||||
Developed Technology | |||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Line Items] | |||||
Gross | 1,657 | $ 1,657 | 1,634 | ||
Accumulated Amortization | (550) | (550) | (467) | ||
Net | 1,107 | $ 1,107 | $ 1,167 | ||
Useful life | 11 years | ||||
North America | |||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible asset impairment charge | $ 1,000 | ||||
|
Goodwill and Other Intangible Assets, Net - Estimated Amortization Expense (Details) $ in Thousands |
Jul. 31, 2017
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | |
Remainder of the fiscal year ending January 31, 2018 | $ 8,118 |
2019 | 16,237 |
2020 | 16,237 |
2021 | 16,237 |
2022 | 16,237 |
Thereafter | 231,000 |
Total | $ 304,066 |
Accrued Expenses (Detail) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation | $ 9,444 | $ 11,488 |
Accrued insurance | 881 | 793 |
Accrued interest | 3,296 | 3,257 |
Accrued professional fees | 262 | 459 |
Accrued taxes | 4,847 | 3,852 |
Capital lease - current | 680 | 545 |
Other accrued expenses | 908 | 1,461 |
Total accrued expenses | $ 20,318 | $ 21,855 |
Debt - Narrative (Details) |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 03, 2016
USD ($)
|
Nov. 13, 2013
USD ($)
|
Feb. 07, 2013 |
Jun. 01, 2011
USD ($)
|
Jun. 01, 2011
USD ($)
|
Feb. 07, 2013
USD ($)
|
Jul. 31, 2017
USD ($)
|
Jul. 31, 2016
USD ($)
|
Jul. 31, 2017
USD ($)
|
Jul. 31, 2016
USD ($)
|
Jan. 31, 2017
USD ($)
|
|
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 435,000,000 | $ 435,000,000 | |||||||||
Total debt | $ 640,659,000 | $ 640,659,000 | $ 642,740,000 | ||||||||
Amortization of deferred financing costs | 800,000 | $ 700,000 | $ 1,509,000 | $ 1,432,000 | |||||||
Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Description of long-term debt | Borrowings under the Credit Facility bear interest at a rate equal to LIBOR plus an applicable margin, subject to a LIBOR floor of 1.25%. The LIBOR margin applicable to the Amended Senior Term Loan is 3.00%, which is 0.75% less than the LIBOR margin applicable to the Original Term Loan. In addition, pursuant to the First Amendment, among other things, (i) the Senior Term Loan maturity date was extended to February 7, 2020, provided that the maturity will be March 2, 2019 if the Amended Senior Term Loan is not repaid or refinanced on or prior to March 2, 2019, (ii) the Revolving Credit Facility maturity date was extended to February 7, 2018, and (iii) we obtained increased flexibility with respect to certain covenants and restrictions relating to our ability to incur additional debt, make investments, debt prepayments, and acquisitions. Principal on the Senior Term Loan is payable in quarterly installments of $1.0 million. Furthermore, the excess cash flow prepayment requirement is in effect until the maturity date. | ||||||||||
Description of restrictive covenants | The Credit Facility, as amended in February 2013, November 2013 and November 2016, places certain limitations on our (and all of our U.S. subsidiaries’) ability to incur additional indebtedness, pay dividends or make other distributions, repurchase capital stock, make certain investments, enter into certain types of transactions with affiliates, utilize assets as security in other transactions, and sell certain assets or merge with or into other companies. | ||||||||||
Description financial covenant | In addition, we may be required to satisfy and maintain a total leverage ratio if there is an outstanding balance on the Revolving Credit Facility of 25% or more of the committed amount on any quarter end. | ||||||||||
Description of covenant compliance | As of July 31, 2017, we did not have an outstanding balance on the revolving loan; and therefore, we were not subject to a leverage test. Additionally, as of July 31, 2017, we were in compliance with all of our requirements and covenant tests under the Credit Facility, as amended. | ||||||||||
Senior Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | 390,000,000 | 390,000,000 | |||||||||
Total debt | 400,659,000 | $ 400,659,000 | $ 402,740,000 | ||||||||
Description of variable rate basis | LIBOR | LIBOR | LIBOR | ||||||||
Basis spread on variable rate | 3.00% | 3.00% | 3.00% | ||||||||
Decrease in LIBOR rate margin from Original Term Loan | 0.0075 | 0.0075 | |||||||||
Maturity date | Feb. 07, 2020 | ||||||||||
Accelerated maturity date | Mar. 02, 2019 | ||||||||||
Quarterly principal installment payments | $ 1,000,000 | ||||||||||
Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of senior unsecured notes | $ 240,000,000 | $ 240,000,000 | |||||||||
Total debt | $ 240,000,000 | $ 240,000,000 | $ 240,000,000 | ||||||||
Maturity date | Jun. 01, 2019 | ||||||||||
Debt outstanding, fixed interest rate | 8.25% | 8.25% | 8.25% | 8.25% | 8.25% | 8.25% | |||||
Description of redemption features | We may redeem all or any portion of the Notes at the redemption prices set forth in the applicable indenture, plus accrued and unpaid interest. Upon a change of control, we are required to make an offer to redeem all of the Notes from the holders at a redemption price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of the repurchase. | ||||||||||
Senior Notes | Upon Change in Control | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price percentage | 101.00% | ||||||||||
Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Revolving credit facility as a percentage of committed amount requiring satisfaction of leverage ratio | 25.00% | ||||||||||
Minimum | Senior Term Loan | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument variable rate floor | 1.25% | ||||||||||
Incremental Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total debt | $ 35,000,000 | ||||||||||
Description of long-term debt | The terms applicable to the Incremental Term Loans are the same as those applicable to the term loans under the Credit Facility. | ||||||||||
Revolving Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, maximum borrowing capacity | $ 40,000,000 | $ 45,000,000 | $ 45,000,000 | ||||||||
Maturity date | Nov. 07, 2019 | Feb. 07, 2018 | |||||||||
Accelerated maturity date | Jan. 30, 2019 | ||||||||||
Revolving Credit Facility Third Amendment [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Deferred costs incurred and recorded | 500,000 | ||||||||||
Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Deferred costs incurred and recorded | $ 6,576,000 | $ 6,576,000 | $ 7,263,000 |
Debt - Components of Long-Term Debt (Details) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt | $ 640,659 | $ 642,740 |
Total debt less deferred financing costs | 634,083 | 635,477 |
Less: current portion (net of current portion of deferred financing costs of $3,162 and $3,080, respectively) | (1,000) | (1,082) |
Long-term debt, net of current portion (net of long-term portion of deferred financing costs of $3,414 and $4,183, respectively) | 633,083 | 634,395 |
Debt | ||
Debt Instrument [Line Items] | ||
Less: deferred financing costs | (6,576) | (7,263) |
Less: current portion (net of current portion of deferred financing costs of $3,162 and $3,080, respectively) | (1,000) | (1,082) |
Senior Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | 400,659 | 402,740 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Total debt | $ 240,000 | $ 240,000 |
Debt - Components of Long-term Debt - Additional Information (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
---|---|---|---|---|---|
Feb. 07, 2013 |
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jan. 31, 2017 |
|
Senior Term Loan | |||||
Debt Instrument [Line Items] | |||||
Description of variable rate basis | LIBOR | LIBOR | LIBOR | ||
Basis spread on variable rate | 3.00% | 3.00% | 3.00% | ||
Interest rate during the period | 4.25% | 4.25% | 4.25% | 4.25% | |
Long-term Debt | |||||
Debt Instrument [Line Items] | |||||
Deferred financing costs, current | $ 3,162 | $ 3,162 | $ 3,080 | ||
Deferred financing costs, noncurrent | $ 3,414 | $ 3,414 | $ 4,183 |
Debt - Interest and Fees Related to Credit Facility and Notes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
Jan. 31, 2017 |
Jun. 01, 2011 |
||||||
Credit Facility | |||||||||||
Schedule Of Interest Expenses [Line Items] | |||||||||||
Total interest and fees | [1] | $ 4,777 | $ 4,867 | $ 9,636 | $ 9,637 | ||||||
Senior Term Loan | |||||||||||
Schedule Of Interest Expenses [Line Items] | |||||||||||
Interest rate during the period | 4.25% | 4.25% | 4.25% | 4.25% | |||||||
Debt | |||||||||||
Schedule Of Interest Expenses [Line Items] | |||||||||||
Total interest and fees | $ 10,081 | $ 10,141 | $ 20,236 | 20,178 | |||||||
Senior Notes | |||||||||||
Schedule Of Interest Expenses [Line Items] | |||||||||||
Total interest and fees | [2] | $ 5,304 | $ 5,274 | $ 10,600 | $ 10,541 | ||||||
Fixed annual rate | 8.25% | 8.25% | 8.25% | 8.25% | 8.25% | ||||||
|
Debt - Principal Payments on Long Term Debt (Details) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
Remainder of the fiscal year ending January 31, 2018 | $ 2,082 | |
2019 | 4,163 | |
2020 | 634,414 | |
Total | $ 640,659 | $ 642,740 |
Income Taxes - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax benefit rate | 36.00% | 22.20% | 36.60% | 22.50% |
Percentage of uncertain tax positions evaluating criteria | 50.00% |
Shareholder's Equity - Narrative (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
Jan. 31, 2017 |
Sep. 12, 2013 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized under equity incentive plan (in shares) | 1,001,339 | |||||
Stock options available for grant (in shares) | 260,170 | 260,170 | ||||
Share-based compensation | $ 305,000 | $ (39,000) | ||||
Number of options vested | 0 | 0 | ||||
Total fair value of options vested | $ 0 | $ 100,000 | ||||
Fair value of share-based compensation liability awards | $ 35,000 | $ 35,000 | $ 66,000 | |||
Share-based compensation liability | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Decrease in non-cash share-based compensation expense | 30,000 | $ 700,000 | ||||
Vest Quarterly at 5% | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation expense | 600,000 | $ 600,000 | ||||
Non-vested stock options weighted average period | 8 months 12 days | |||||
Vest Upon Change in Control | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation expense | 15,900,000 | $ 15,900,000 | ||||
Vest Upon Change in Control | CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation expense | 8,100,000 | 8,100,000 | ||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total unrecognized compensation expense | $ 16,500,000 | 16,500,000 | ||||
Stock Options | CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation | $ 0 |
Shareholder's Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jul. 31, 2017 |
Jan. 31, 2017 |
||||
Options, Outstanding [Roll Forward] | |||||
Number of options outstanding, beginning balance (shares) | 766,348 | ||||
Number of options, granted (shares) | 0 | ||||
Number of options, exercised (shares) | 0 | ||||
Number of options, forfeited/cancelled/expired (shares) | (33,328) | ||||
Number of options outstanding, ending balance (shares) | 733,020 | 766,348 | |||
Number of options, vested and expected to vest at end of period (in shares) | 78,344 | ||||
Number of options, exercisable at end of period (shares) | 78,344 | ||||
Options Outstanding, Weighted Average Exercise Price [Abstract] | |||||
Weighted average exercise price, beginning balance (USD per share) | $ 83.47 | ||||
Weighted average exercise price, granted (USD per share) | 0.00 | ||||
Weighted average exercise price, exercised (USD per share) | 0.00 | ||||
Weighted average exercise price, forfeited/cancelled/expired (USD per share) | 39.12 | ||||
Weighted average exercise price, ending balance (USD per share) | 83.92 | $ 83.47 | |||
Weighted average exercise price, vested and expected to vest at end of period (USD per share) | 74.90 | ||||
Weighted average exercise price, exercisable at end of period (USD per share) | $ 74.90 | ||||
Options, Aggregate Intrinsic Value [Abstract] | |||||
Aggregate intrinsic value, beginning balance | [1] | $ 0 | |||
Aggregate intrinsic value, exercised | [1] | 0 | |||
Aggregate intrinsic value, ending balance | [1] | 0 | $ 0 | ||
Aggregate intrinsic value, vested and expected to vest at end of period | [1] | 0 | |||
Aggregate intrinsic value, exercisable at end of period | [1] | $ 0 | |||
Options, Weighted Average Term Remaining [Abstract] | |||||
Weighted average term remaining, outstanding at end of period | 6 years 1 month | 6 years 6 months | |||
Weighted average term remaining, vested and expected to vest at end of period | 3 years 6 months | ||||
Weighted average term remaining, exercisable at end of period | 2 years 1 month | ||||
Weighted average grant date fair value [Abstract] | |||||
Weighted average grant date fair value, granted (USD per share) | $ 0.00 | ||||
|
Shareholder's Equity - Non-Cash Share-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Non-cash share-based compensation expense (income) | $ 305 | $ (39) | ||
Employee Related Expenses [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Non-cash share-based compensation expense (income) | $ 167 | $ 233 | $ 305 | $ (39) |
Shareholder's Equity - Stock Option Valuation Assumptions (Details) |
6 Months Ended | |
---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
|
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 56.00% | 56.00% |
Expected dividends | 0.00% | 0.00% |
Expected term | 7 years 2 months | 7 years 2 months |
Risk-free interest rate | 1.50% | 1.50% |
Share-based compensation liability | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 60.00% | 60.00% |
Expected dividends | 0.00% | 0.00% |
Expected term | 9 months | 1 year 1 month |
Risk-free interest rate | 0.50% | 0.50% |
Segment Reporting - Selected Statement of Operations Data (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | $ 68,201 | $ 63,200 | $ 131,340 | $ 128,232 | |||
Depreciation and amortization | 14,748 | 15,075 | 29,469 | 30,184 | |||
Interest expense (income), net | 10,210 | 10,626 | 20,192 | 21,149 | |||
Income tax (benefit) expense | (2,795) | (2,252) | (7,607) | (23,141) | |||
Net (loss) income | (4,949) | (7,885) | (13,160) | (79,698) | |||
Other operating expenses | 3,568 | 3,398 | 7,588 | 6,982 | |||
Intersegment Eliminations | |||||||
Segment Reporting Information [Line Items] | |||||||
Other operating expenses | 1,000 | 900 | 1,800 | 1,700 | |||
North America | |||||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | 57,273 | 52,737 | 111,451 | 109,211 | |||
Depreciation and amortization | 13,284 | 13,852 | 26,674 | 27,761 | |||
Interest expense (income), net | 10,210 | 10,627 | 20,203 | 21,143 | |||
Income tax (benefit) expense | (3,484) | (3,072) | (8,730) | (24,417) | |||
Net (loss) income | [1] | (6,444) | (9,933) | (15,629) | (82,775) | ||
Europe | |||||||
Segment Reporting Information [Line Items] | |||||||
Total revenue | 10,928 | 10,463 | 19,889 | 19,021 | |||
Depreciation and amortization | 1,464 | 1,223 | 2,795 | 2,423 | |||
Interest expense (income), net | 0 | (1) | (11) | 6 | |||
Income tax (benefit) expense | 689 | 820 | 1,123 | 1,276 | |||
Net (loss) income | [1] | $ 1,495 | $ 2,048 | $ 2,469 | $ 3,077 | ||
|
Segment Reporting - Total Assets and Long-lived Asset Information (Details) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Revenue from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | $ 818,108 | $ 830,540 |
Long-lived assets | 320,495 | 320,707 |
North America | ||
Revenue from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | 690,845 | 716,640 |
Long-lived assets | 271,584 | 276,136 |
Europe | ||
Revenue from External Customers and Long-Lived Assets [Line Items] | ||
Total assets | 127,263 | 113,900 |
Long-lived assets | $ 48,911 | $ 44,571 |
Related Party Transactions - Narrative (Details) - Sponsor - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
Jan. 31, 2017 |
|
Related Party Transaction [Line Items] | |||||
Description of related party transaction | Pursuant to a professional services agreement between us and Permira Advisers L.L.C. (the “Sponsor”), we agreed to pay the Sponsor an annual management fee of $0.5 million, payable quarterly, plus reasonable out-of-pocket expenses, in connection with the planning, strategy, and oversight support provided to management. | ||||
Annual management fee | $ 500 | ||||
Management fees and expenses recorded | $ 100 | $ 100 | 300 | $ 300 | |
Management fees payable to the Sponsor | $ 40 | $ 40 | $ 40 |
Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
Jul. 31, 2016 |
Jan. 31, 2016 |
---|---|---|---|---|
Current assets | ||||
Cash and cash equivalents | $ 24,595 | $ 44,563 | $ 33,637 | $ 44,754 |
Accounts receivable, net | 61,193 | 52,478 | ||
Inventories, net | 3,970 | 3,721 | ||
Prepaid expenses and other assets | 3,461 | 4,145 | ||
Total current assets | 93,219 | 104,907 | ||
Property and equipment, net | 320,495 | 320,707 | ||
Goodwill | 54,836 | 49,918 | ||
Other intangible assets, net | 347,407 | 354,418 | ||
Other assets | 2,151 | 590 | ||
Investment in subsidiaries | 0 | 0 | ||
Total assets | 818,108 | 830,540 | ||
Current liabilities: | ||||
Accounts payable | 15,926 | 17,697 | ||
Accrued expenses | 20,318 | 21,855 | ||
Current portion of long-term debt (net of deferred financing costs) | 1,000 | 1,082 | ||
Intercompany balances | 0 | 0 | ||
Total current liabilities | 37,244 | 40,634 | ||
Long-term debt, net of current portion (net of deferred financing costs) | 633,083 | 634,395 | ||
Deferred tax liabilities, net | 102,444 | 110,114 | ||
Share-based compensation liability | 35 | 66 | ||
Other long-term liabilities | 2,770 | 2,936 | ||
Total liabilities | 775,576 | 788,145 | ||
Total shareholder’s equity | 42,532 | 42,395 | ||
Total liabilities and shareholder’s equity | 818,108 | 830,540 | ||
Eliminations | ||||
Current assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Investment in subsidiaries | (426,608) | (406,903) | ||
Total assets | (426,608) | (406,903) | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses | 0 | 0 | ||
Current portion of long-term debt (net of deferred financing costs) | 0 | 0 | ||
Intercompany balances | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Long-term debt, net of current portion (net of deferred financing costs) | 0 | 0 | ||
Share-based compensation liability | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Total shareholder’s equity | (426,608) | (406,903) | ||
Total liabilities and shareholder’s equity | (426,608) | (406,903) | ||
Parent | ||||
Current assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Prepaid expenses and other assets | 59 | 35 | ||
Total current assets | 59 | 35 | ||
Property and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Investment in subsidiaries | 299,270 | 297,137 | ||
Total assets | 299,329 | 297,172 | ||
Current liabilities: | ||||
Accounts payable | 23 | 56 | ||
Accrued expenses | 3,296 | 3,258 | ||
Current portion of long-term debt (net of deferred financing costs) | 1,000 | 1,082 | ||
Intercompany balances | (337,292) | (341,847) | ||
Total current liabilities | (332,973) | (337,451) | ||
Long-term debt, net of current portion (net of deferred financing costs) | 633,905 | 634,395 | ||
Deferred tax liabilities, net | (44,135) | (42,166) | ||
Share-based compensation liability | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Total liabilities | 256,797 | 254,778 | ||
Total shareholder’s equity | 42,532 | 42,394 | ||
Total liabilities and shareholder’s equity | 299,329 | 297,172 | ||
Guarantors | ||||
Current assets | ||||
Cash and cash equivalents | 8,132 | 30,607 | 21,684 | 34,014 |
Accounts receivable, net | 47,385 | 41,902 | ||
Inventories, net | 3,815 | 3,622 | ||
Prepaid expenses and other assets | 2,278 | 3,201 | ||
Total current assets | 61,610 | 79,332 | ||
Property and equipment, net | 258,243 | 264,194 | ||
Goodwill | 0 | 0 | ||
Other intangible assets, net | 324,306 | 333,033 | ||
Other assets | 1,878 | 452 | ||
Investment in subsidiaries | 128,159 | 109,766 | ||
Total assets | 774,196 | 786,777 | ||
Current liabilities: | ||||
Accounts payable | 13,977 | 15,839 | ||
Accrued expenses | 13,251 | 14,377 | ||
Current portion of long-term debt (net of deferred financing costs) | 0 | 0 | ||
Intercompany balances | 302,385 | 310,812 | ||
Total current liabilities | 329,613 | 341,028 | ||
Long-term debt, net of current portion (net of deferred financing costs) | (822) | 0 | ||
Deferred tax liabilities, net | 138,986 | 145,806 | ||
Share-based compensation liability | 35 | 66 | ||
Other long-term liabilities | 2,607 | 2,739 | ||
Total liabilities | 470,419 | 489,639 | ||
Total shareholder’s equity | 303,777 | 297,138 | ||
Total liabilities and shareholder’s equity | 774,196 | 786,777 | ||
Non-Guarantor Subsidiaries | ||||
Current assets | ||||
Cash and cash equivalents | 16,463 | 13,956 | $ 11,953 | $ 10,740 |
Accounts receivable, net | 13,808 | 10,576 | ||
Inventories, net | 155 | 99 | ||
Prepaid expenses and other assets | 1,124 | 909 | ||
Total current assets | 31,550 | 25,540 | ||
Property and equipment, net | 62,252 | 56,513 | ||
Goodwill | 54,836 | 49,918 | ||
Other intangible assets, net | 23,101 | 21,385 | ||
Other assets | 273 | 138 | ||
Investment in subsidiaries | (821) | 0 | ||
Total assets | 171,191 | 153,494 | ||
Current liabilities: | ||||
Accounts payable | 1,926 | 1,802 | ||
Accrued expenses | 3,771 | 4,220 | ||
Current portion of long-term debt (net of deferred financing costs) | 0 | 0 | ||
Intercompany balances | 34,907 | 31,035 | ||
Total current liabilities | 40,604 | 37,057 | ||
Long-term debt, net of current portion (net of deferred financing costs) | 0 | 0 | ||
Deferred tax liabilities, net | 7,593 | 6,474 | ||
Share-based compensation liability | 0 | 0 | ||
Other long-term liabilities | 163 | 197 | ||
Total liabilities | 48,360 | 43,728 | ||
Total shareholder’s equity | 122,831 | 109,766 | ||
Total liabilities and shareholder’s equity | $ 171,191 | $ 153,494 |
Condensed Consolidating Balance Sheets - Additional Information (Details) - Long-term Debt - USD ($) $ in Thousands |
Jul. 31, 2017 |
Jan. 31, 2017 |
---|---|---|
Deferred financing costs, current | $ 3,162 | $ 3,080 |
Deferred financing costs, noncurrent | 3,414 | 4,183 |
Parent | ||
Deferred financing costs, current | 3,162 | 3,080 |
Deferred financing costs, noncurrent | $ 3,414 | $ 4,183 |
Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
|
Condensed Financial Statements, Captions [Line Items] | ||||
Total revenue | $ 68,201 | $ 63,200 | $ 131,340 | $ 128,232 |
Operating expenses: | ||||
Employee related expenses | 24,033 | 24,267 | 48,973 | 48,957 |
Rental expense | 8,812 | 6,840 | 17,569 | 14,350 |
Repair and maintenance | 3,441 | 2,874 | 6,609 | 5,187 |
Cost of goods sold | 3,416 | 2,300 | 6,559 | 5,362 |
Facility expense | 6,851 | 6,649 | 13,683 | 13,605 |
Professional fees | 689 | 1,126 | 2,048 | 2,218 |
Other operating expenses | 3,568 | 3,398 | 7,588 | 6,982 |
Depreciation and amortization | 14,748 | 15,075 | 29,469 | 30,184 |
Gain on sale of equipment | (606) | (976) | (1,726) | (1,634) |
Impairment of goodwill and other intangible assets | 1,000 | 0 | 1,000 | 84,046 |
Impairment of long-lived assets | 96 | 439 | 296 | 439 |
Total operating expenses | 66,048 | 61,992 | 132,068 | 209,696 |
(Loss) income from operations | 2,153 | 1,208 | (728) | (81,464) |
Other expenses (income): | ||||
Interest expense, net | 10,210 | 10,626 | 20,192 | 21,149 |
Foreign currency exchange loss (gain) | (303) | 731 | (143) | 238 |
Other income, net | (10) | (12) | (10) | (12) |
Total other expenses (income), net | 9,897 | 11,345 | 20,039 | 21,375 |
(Loss) income before income tax (benefit) expense | (7,744) | (10,137) | (20,767) | (102,839) |
Income tax (benefit) expense | (2,795) | (2,252) | (7,607) | (23,141) |
(Loss) income before equity in net earnings of subsidiaries | (4,949) | (7,885) | (13,160) | (79,698) |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net (loss) income | (4,949) | (7,885) | (13,160) | (79,698) |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Employee related expenses | 0 | 0 | 0 | 0 |
Rental expense | 0 | 0 | 0 | 0 |
Repair and maintenance | 0 | 0 | 0 | 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Facility expense | 0 | 0 | 0 | 0 |
Professional fees | 0 | 0 | 0 | 0 |
Other operating expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Gain on sale of equipment | 0 | 0 | 0 | 0 |
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | |
Impairment of long-lived assets | 0 | 0 | 0 | 0 |
Total operating expenses | 0 | 0 | 0 | 0 |
(Loss) income from operations | 0 | 0 | 0 | 0 |
Other expenses (income): | ||||
Interest expense, net | 0 | 0 | 0 | 0 |
Foreign currency exchange loss (gain) | 0 | 0 | 0 | 0 |
Other income, net | 0 | 0 | 0 | 0 |
Total other expenses (income), net | 0 | 0 | 0 | 0 |
(Loss) income before income tax (benefit) expense | 0 | 0 | 0 | 0 |
Income tax (benefit) expense | 0 | 0 | 0 | 0 |
(Loss) income before equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Equity in net earnings of subsidiaries | (6,617) | (4,096) | (8,710) | 56,743 |
Net (loss) income | (6,617) | (4,096) | (8,710) | 56,743 |
Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Employee related expenses | 3 | 14 | 7 | 46 |
Rental expense | 0 | 0 | 0 | 0 |
Repair and maintenance | 0 | 0 | 0 | 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Facility expense | 3 | 3 | 9 | 11 |
Professional fees | 15 | 9 | 25 | 61 |
Other operating expenses | 150 | 136 | 310 | 294 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Gain on sale of equipment | 0 | 0 | 0 | 0 |
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | |
Impairment of long-lived assets | 0 | 0 | 0 | 0 |
Total operating expenses | 171 | 162 | 351 | 412 |
(Loss) income from operations | (171) | (162) | (351) | (412) |
Other expenses (income): | ||||
Interest expense, net | 10,170 | 10,614 | 20,144 | 21,131 |
Foreign currency exchange loss (gain) | 0 | 0 | 0 | 0 |
Other income, net | 0 | 0 | 0 | 0 |
Total other expenses (income), net | 10,170 | 10,614 | 20,144 | 21,131 |
(Loss) income before income tax (benefit) expense | (10,341) | (10,776) | (20,495) | (21,543) |
Income tax (benefit) expense | (1,004) | (1,070) | (1,969) | (2,153) |
(Loss) income before equity in net earnings of subsidiaries | (9,337) | (9,706) | (18,526) | (19,390) |
Equity in net earnings of subsidiaries | 4,388 | 1,821 | 5,366 | (60,308) |
Net (loss) income | (4,949) | (7,885) | (13,160) | (79,698) |
Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Total revenue | 55,239 | 51,107 | 108,035 | 106,169 |
Operating expenses: | ||||
Employee related expenses | 20,615 | 21,169 | 42,337 | 42,553 |
Rental expense | 7,446 | 5,822 | 15,085 | 12,536 |
Repair and maintenance | 3,127 | 2,642 | 6,068 | 4,774 |
Cost of goods sold | 3,184 | 2,133 | 6,064 | 5,088 |
Facility expense | 6,126 | 5,971 | 12,188 | 12,226 |
Professional fees | 528 | 921 | 1,765 | 1,828 |
Other operating expenses | 1,687 | 1,614 | 3,930 | 3,551 |
Depreciation and amortization | 13,005 | 13,561 | 26,067 | 27,194 |
Gain on sale of equipment | (614) | (969) | (1,695) | (1,617) |
Impairment of goodwill and other intangible assets | 1,000 | 1,000 | 84,046 | |
Impairment of long-lived assets | 87 | 439 | 287 | 439 |
Total operating expenses | 56,191 | 53,303 | 113,096 | 192,618 |
(Loss) income from operations | (952) | (2,196) | (5,061) | (86,449) |
Other expenses (income): | ||||
Interest expense, net | 38 | 12 | 55 | 12 |
Foreign currency exchange loss (gain) | (532) | 205 | (314) | (404) |
Other income, net | (10) | (12) | (10) | (12) |
Total other expenses (income), net | (504) | 205 | (269) | (404) |
(Loss) income before income tax (benefit) expense | (448) | (2,401) | (4,792) | (86,045) |
Income tax (benefit) expense | (2,607) | (1,947) | (6,814) | (22,172) |
(Loss) income before equity in net earnings of subsidiaries | 2,159 | (454) | 2,022 | (63,873) |
Equity in net earnings of subsidiaries | 2,229 | 2,275 | 3,344 | 3,565 |
Net (loss) income | 4,388 | 1,821 | 5,366 | (60,308) |
Non-Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Total revenue | 12,962 | 12,093 | 23,305 | 22,063 |
Operating expenses: | ||||
Employee related expenses | 3,415 | 3,084 | 6,629 | 6,358 |
Rental expense | 1,366 | 1,018 | 2,484 | 1,814 |
Repair and maintenance | 314 | 232 | 541 | 413 |
Cost of goods sold | 232 | 167 | 495 | 274 |
Facility expense | 722 | 675 | 1,486 | 1,368 |
Professional fees | 146 | 196 | 258 | 329 |
Other operating expenses | 1,731 | 1,648 | 3,348 | 3,137 |
Depreciation and amortization | 1,743 | 1,514 | 3,402 | 2,990 |
Gain on sale of equipment | 8 | (7) | (31) | (17) |
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | |
Impairment of long-lived assets | 9 | 0 | 9 | 0 |
Total operating expenses | 9,686 | 8,527 | 18,621 | 16,666 |
(Loss) income from operations | 3,276 | 3,566 | 4,684 | 5,397 |
Other expenses (income): | ||||
Interest expense, net | 2 | 0 | (7) | 6 |
Foreign currency exchange loss (gain) | 229 | 526 | 171 | 642 |
Other income, net | 0 | 0 | 0 | 0 |
Total other expenses (income), net | 231 | 526 | 164 | 648 |
(Loss) income before income tax (benefit) expense | 3,045 | 3,040 | 4,520 | 4,749 |
Income tax (benefit) expense | 816 | 765 | 1,176 | 1,184 |
(Loss) income before equity in net earnings of subsidiaries | 2,229 | 2,275 | 3,344 | 3,565 |
Equity in net earnings of subsidiaries | 0 | 0 | 0 | 0 |
Net (loss) income | $ 2,229 | $ 2,275 | $ 3,344 | $ 3,565 |
Condensed Consolidating Statements of Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
|||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||
Net (loss) income | $ (4,949) | $ (7,885) | $ (13,160) | $ (79,698) | ||||||
Other comprehensive income: | ||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | 0 | 292 | [1] | 0 | 586 | [2] | ||||
Foreign currency translation adjustments | 10,902 | (3,216) | 12,992 | 3,220 | ||||||
Other comprehensive income | 10,902 | (2,924) | 12,992 | 3,806 | ||||||
Total comprehensive (loss) income | 5,953 | (10,809) | (168) | (75,892) | ||||||
Tax expense for unrealized gain on interest rate swap agreements | 184 | 365 | ||||||||
Eliminations | ||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||
Net (loss) income | (6,617) | (4,096) | (8,710) | 56,743 | ||||||
Other comprehensive income: | ||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | 0 | 0 | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | ||||||
Other comprehensive income | 0 | 0 | 0 | 0 | ||||||
Total comprehensive (loss) income | (6,617) | (4,096) | (8,710) | 56,743 | ||||||
Parent | ||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||
Net (loss) income | (4,949) | (7,885) | (13,160) | (79,698) | ||||||
Other comprehensive income: | ||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | 292 | 586 | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | ||||||
Other comprehensive income | 0 | 292 | 0 | 586 | ||||||
Total comprehensive (loss) income | (4,949) | (7,593) | (13,160) | (79,112) | ||||||
Tax expense for unrealized gain on interest rate swap agreements | 0 | 184 | 0 | |||||||
Guarantors | ||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||
Net (loss) income | 4,388 | 1,821 | 5,366 | (60,308) | ||||||
Other comprehensive income: | ||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | 0 | 0 | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | ||||||
Other comprehensive income | 0 | 0 | 0 | 0 | ||||||
Total comprehensive (loss) income | 4,388 | 1,821 | 5,366 | (60,308) | ||||||
Non-Guarantor Subsidiaries | ||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||
Net (loss) income | 2,229 | 2,275 | 3,344 | 3,565 | ||||||
Other comprehensive income: | ||||||||||
Unrealized gain on interest rate swap agreements, net of tax expense of $184 and $365 for the three and six months ended July 31, 2016 | 0 | 0 | ||||||||
Foreign currency translation adjustments | 10,902 | (3,216) | 12,992 | 3,220 | ||||||
Other comprehensive income | 10,902 | (3,216) | 12,992 | 3,220 | ||||||
Total comprehensive (loss) income | $ 13,131 | $ (941) | $ 16,336 | $ 6,785 | ||||||
|
Condensed Consolidating Statements of Cash Flow (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 31, 2017 |
Jul. 31, 2016 |
Jul. 31, 2017 |
Jul. 31, 2016 |
|
Operating activities | ||||
Net (loss) income | $ (4,949) | $ (7,885) | $ (13,160) | $ (79,698) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
Provision for doubtful accounts | 486 | 435 | ||
Provision for excess and obsolete inventory, net | (6) | 0 | ||
Share-based compensation | 305 | (39) | ||
Gain on sale of equipment | (606) | (976) | (1,726) | (1,634) |
Depreciation and amortization | 14,748 | 15,075 | 29,469 | 30,184 |
Amortization of deferred financing costs | 800 | 700 | 1,509 | 1,432 |
Deferred income taxes | (8,308) | (24,326) | ||
Amortization of above market lease | (76) | (76) | ||
Impairment of goodwill and other intangible assets | 1,000 | 0 | 1,000 | 84,046 |
Impairment of long-lived assets | 96 | 439 | 296 | 439 |
Equity in net earnings of subsidiaries, net of taxes | 0 | 0 | 0 | 0 |
Changes in assets and liabilities: | ||||
Accounts receivable | (8,167) | 4,571 | ||
Inventories | (235) | 4,070 | ||
Prepaid expenses and other assets | 681 | (384) | ||
Accounts payable and other liabilities | (4,739) | (6,264) | ||
Net cash (used in) provided by operating activities | (2,671) | 12,756 | ||
Investing activities | ||||
Purchases of property and equipment | (16,874) | (24,679) | ||
Proceeds from sale of equipment | 503 | 2,514 | ||
Net cash used in investing activities | (16,371) | (22,165) | ||
Financing activities | ||||
Intercompany investments and loans | 0 | 0 | ||
Repayment of long-term debt | (2,081) | (2,081) | ||
Return of capital to BakerCorp International Holdings, Inc. | (8) | |||
Net cash provided by (used in) financing activities | (2,081) | (2,089) | ||
Effect of foreign currency translation on cash | 1,155 | 381 | ||
Net (decrease) increase in cash and cash equivalents | (19,968) | (11,117) | ||
Cash and cash equivalents, beginning of period | 44,563 | 44,754 | ||
Cash and cash equivalents, end of period | 24,595 | 33,637 | 24,595 | 33,637 |
Eliminations | ||||
Operating activities | ||||
Net (loss) income | (6,617) | (4,096) | (8,710) | 56,743 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
Provision for doubtful accounts | 0 | 0 | ||
Provision for excess and obsolete inventory, net | 0 | 0 | ||
Share-based compensation | 0 | 0 | ||
Gain on sale of equipment | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Amortization of deferred financing costs | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Amortization of above market lease | 0 | 0 | ||
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | |
Impairment of long-lived assets | 0 | 0 | 0 | 0 |
Equity in net earnings of subsidiaries, net of taxes | 6,617 | 4,096 | 8,710 | (56,743) |
Changes in assets and liabilities: | ||||
Accounts receivable | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other assets | 0 | 0 | ||
Accounts payable and other liabilities | (2) | 0 | ||
Net cash (used in) provided by operating activities | (2) | 0 | ||
Investing activities | ||||
Purchases of property and equipment | 0 | 0 | ||
Proceeds from sale of equipment | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | ||
Financing activities | ||||
Intercompany investments and loans | (2,446) | (579) | ||
Repayment of long-term debt | 0 | 0 | ||
Return of capital to BakerCorp International Holdings, Inc. | 0 | |||
Net cash provided by (used in) financing activities | (2,446) | (579) | ||
Effect of foreign currency translation on cash | 2,448 | 579 | ||
Net (decrease) increase in cash and cash equivalents | 0 | 0 | ||
Cash and cash equivalents, beginning of period | 0 | 0 | ||
Cash and cash equivalents, end of period | 0 | 0 | 0 | 0 |
Parent | ||||
Operating activities | ||||
Net (loss) income | (4,949) | (7,885) | (13,160) | (79,698) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
Provision for doubtful accounts | 0 | 0 | ||
Provision for excess and obsolete inventory, net | 0 | 0 | ||
Share-based compensation | 7 | 46 | ||
Gain on sale of equipment | 0 | 0 | 0 | 0 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Amortization of deferred financing costs | 1,509 | 1,432 | ||
Deferred income taxes | (1,969) | (2,152) | ||
Amortization of above market lease | 0 | 0 | ||
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | |
Impairment of long-lived assets | 0 | 0 | 0 | 0 |
Equity in net earnings of subsidiaries, net of taxes | (4,388) | (1,821) | (5,366) | 60,308 |
Changes in assets and liabilities: | ||||
Accounts receivable | 0 | 0 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other assets | (24) | (33) | ||
Accounts payable and other liabilities | 6 | (54) | ||
Net cash (used in) provided by operating activities | (18,997) | (20,151) | ||
Investing activities | ||||
Purchases of property and equipment | 0 | 0 | ||
Proceeds from sale of equipment | 0 | 0 | ||
Net cash used in investing activities | 0 | 0 | ||
Financing activities | ||||
Intercompany investments and loans | 21,078 | 22,240 | ||
Repayment of long-term debt | (2,081) | (2,081) | ||
Return of capital to BakerCorp International Holdings, Inc. | (8) | |||
Net cash provided by (used in) financing activities | 18,997 | 20,151 | ||
Effect of foreign currency translation on cash | 0 | 0 | ||
Net (decrease) increase in cash and cash equivalents | 0 | 0 | ||
Cash and cash equivalents, beginning of period | 0 | 0 | ||
Cash and cash equivalents, end of period | 0 | 0 | 0 | 0 |
Guarantors | ||||
Operating activities | ||||
Net (loss) income | 4,388 | 1,821 | 5,366 | (60,308) |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
Provision for doubtful accounts | 443 | 510 | ||
Provision for excess and obsolete inventory, net | (6) | 0 | ||
Share-based compensation | 298 | (85) | ||
Gain on sale of equipment | (614) | (969) | (1,695) | (1,617) |
Depreciation and amortization | 13,005 | 13,561 | 26,067 | 27,194 |
Amortization of deferred financing costs | 0 | 0 | ||
Deferred income taxes | (6,820) | (22,174) | ||
Amortization of above market lease | (76) | (76) | ||
Impairment of goodwill and other intangible assets | 1,000 | 1,000 | 84,046 | |
Impairment of long-lived assets | 87 | 439 | 287 | 439 |
Equity in net earnings of subsidiaries, net of taxes | (2,229) | (2,275) | (3,344) | (3,565) |
Changes in assets and liabilities: | ||||
Accounts receivable | (5,926) | 7,588 | ||
Inventories | (187) | 4,069 | ||
Prepaid expenses and other assets | 993 | (388) | ||
Accounts payable and other liabilities | (3,892) | (6,982) | ||
Net cash (used in) provided by operating activities | 12,508 | 28,651 | ||
Investing activities | ||||
Purchases of property and equipment | (13,999) | (22,201) | ||
Proceeds from sale of equipment | 1,525 | 2,401 | ||
Net cash used in investing activities | (12,474) | (19,800) | ||
Financing activities | ||||
Intercompany investments and loans | (22,509) | (21,181) | ||
Repayment of long-term debt | 0 | 0 | ||
Return of capital to BakerCorp International Holdings, Inc. | 0 | |||
Net cash provided by (used in) financing activities | (22,509) | (21,181) | ||
Effect of foreign currency translation on cash | 0 | 0 | ||
Net (decrease) increase in cash and cash equivalents | (22,475) | (12,330) | ||
Cash and cash equivalents, beginning of period | 30,607 | 34,014 | ||
Cash and cash equivalents, end of period | 8,132 | 21,684 | 8,132 | 21,684 |
Non-Guarantor Subsidiaries | ||||
Operating activities | ||||
Net (loss) income | 2,229 | 2,275 | 3,344 | 3,565 |
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||
Recoveries of doubtful accounts | 43 | (75) | ||
Provision for excess and obsolete inventory, net | 0 | 0 | ||
Share-based compensation | 0 | 0 | ||
Gain on sale of equipment | 8 | (7) | (31) | (17) |
Depreciation and amortization | 1,743 | 1,514 | 3,402 | 2,990 |
Amortization of deferred financing costs | 0 | 0 | ||
Deferred income taxes | 481 | 0 | ||
Amortization of above market lease | 0 | 0 | ||
Impairment of goodwill and other intangible assets | 0 | 0 | 0 | |
Impairment of long-lived assets | 9 | 0 | 9 | 0 |
Equity in net earnings of subsidiaries, net of taxes | 0 | 0 | 0 | 0 |
Changes in assets and liabilities: | ||||
Accounts receivable | (2,241) | (3,017) | ||
Inventories | (48) | 1 | ||
Prepaid expenses and other assets | (288) | 37 | ||
Accounts payable and other liabilities | (851) | 772 | ||
Net cash (used in) provided by operating activities | 3,820 | 4,256 | ||
Investing activities | ||||
Purchases of property and equipment | (2,875) | (2,478) | ||
Proceeds from sale of equipment | (1,022) | 113 | ||
Net cash used in investing activities | (3,897) | (2,365) | ||
Financing activities | ||||
Intercompany investments and loans | 3,877 | (480) | ||
Repayment of long-term debt | 0 | 0 | ||
Return of capital to BakerCorp International Holdings, Inc. | 0 | |||
Net cash provided by (used in) financing activities | 3,877 | (480) | ||
Effect of foreign currency translation on cash | (1,293) | (198) | ||
Net (decrease) increase in cash and cash equivalents | 2,507 | 1,213 | ||
Cash and cash equivalents, beginning of period | 13,956 | 10,740 | ||
Cash and cash equivalents, end of period | $ 16,463 | $ 11,953 | $ 16,463 | $ 11,953 |
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