Business Segments

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Business Segments

Business Segments

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

Management evaluates the performance of its operating segments based on net revenues and Adjusted EBITDA, which is a non-GAAP financial measure. The accounting policies of each of the operating segments are the same as those described in the summary of significant accounting policies in Note 2. Adjusted EBITDA represents income from operations excluding depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities and other items as described below. Management does not evaluate the performance of its operating segments using asset measures. The identifiable assets by segment disclosed in this note are those assets specifically identifiable within each segment and include cash, accounts receivable, inventory, goodwill and intangible assets. Shared service assets are primarily comprised of short-term investments, capitalized internal-use software and net property and equipment of the corporate headquarters.

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

	North America		Latin America		EMEA		Other			Total
Fiscal 2015:
Net revenues from third parties	$	708,532	$	95,939	$	224,882	$	—		$	1,029,353
Net revenues from other segments	7		1,422		7,269		(8,698		)	—
Total net revenues	708,539		97,361		232,151		(8,698		)	1,029,353
Adjusted EBITDA(1)	64,612		6,380		8,655		(27,751		)	51,896
Total assets	390,739		45,053		150,007		22,668			608,467
Fiscal 2014:
Net revenues from third parties	688,942		99,734		211,457		—			1,000,133
Net revenues from other segments	48		429		5,160		(5,637		)	—
Total net revenues	688,990		100,163		216,617		(5,637		)	1,000,133
Adjusted EBITDA(1)	57,662		5,273		5,893		(25,990		)	42,838
Total assets	443,530		30,488		135,257		21,976			631,251
Fiscal 2013:
Net revenues from third parties	657,989		88,016		144,955		—			890,960
Net revenues from other segments	33		1,270		75		(1,378		)	—
Total net revenues	658,022		89,286		145,030		(1,378		)	890,960
Adjusted EBITDA(1)	51,873		3,098		764		(28,834		)	26,901
Total assets	431,562		29,841		119,531		33,733			614,667

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

The table below reconciles the total of the reportable segments' Adjusted EBITDA and the Adjusted EBITDA included in Other to consolidated income before income taxes (in thousands):

	Year Ended December 31,
	2015			2014			2013
Adjusted EBITDA	$	51,896		$	42,838		$	26,901
Depreciation and amortization	(17,472		)	(17,723		)	(13,664		)
Stock-based compensation	(5,873		)	(5,352		)	(4,733		)
Change in fair value of contingent consideration	270			37,873			31,331
Goodwill impairment charge	(37,539		)	—			(37,908		)
Intangible asset impairment charges	(202		)	(2,710		)	—
Restructuring and other charges	(1,053		)	—			(4,322		)
Secured asset reserve(1)	(2,022		)	(940		)	—
Restatement-related professional fees	—			(2,093		)	—
Payments to former owner of Productions Graphics, net of cash recovered	—			—			(2,625		)
Legal fees in connection with patent infringement	—			—			(961		)
Total other expense	(7,678		)	(5,118		)	(3,235		)
Income (loss) before income taxes	$	(19,673	)	$	46,775		$	(9,216	)

(1) The Company accrued a reserve of $2.0 million and $0.9 million in 2015 and 2014, respectively, on inventory in which it holds a security interest. The inventory was procured for a former transactional client.

The Company had long-lived assets, consisting of net property and equipment, in the United States of $22.1 million, $21.5 million and $18.1 million at December 31, 2015, 2014 and 2013, respectively.  Long-lived assets in foreign countries were $10.6 million, $8.3 million and $5.6 million at December 31, 2015, 2014 and 2013, respectively. 

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