Business Segments

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Segments

usiness Segments

Segment information is prepared on the same basis that our Chief Executive Officer, who is our chief operating decision maker (“CODM”), manages the segments, evaluates financial results, and makes key operating decisions. In fiscal year 2015, segments were organized and managed by the CODM as three business segments: North America, including the United States and Canada; EMEA, including operations in the United Kingdom, continental Europe, the Middle East, Africa and Asia; and LATAM, including operations in Mexico, South America and Central America. Effective in the first fiscal quarter of 2016, the Company implemented changes to the organizational structure of the Latin America and EMEA segments which included combining the two segments under single management and managing those businesses as one segment. In conjunction with this change, the CODM now manages the results of the Company as two business segments: North America and International. The North America segment includes operations in the United States and Canada; the International segment includes all other operations across Europe, Asia, Mexico, Central America and South America; Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses. All transactions between segments are presented at their gross amounts and eliminated through Other.

Management evaluates the performance of its operating segments based on net revenues and Adjusted EBITDA, which is a non-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 1. 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 table below presents financial information for the Company’s reportable segments and Other for the three month periods noted (in thousands):

	North America		International		Other			Total
Three Months Ended March 31, 2016:
Net revenue from third parties	$	190,004	$	81,069	$	—		$	271,073
Net revenue from other segments	—		3,767		(3,767		)	—
Total net revenues	190,004		84,836		(3,767		)	271,073
Adjusted EBITDA (1)	16,346		4,102		(7,888		)	12,560
Three Months Ended March 31, 2015:
Net revenue from third parties	$	170,801	$	71,294	$	—		$	242,095
Net revenue from other segments	—		186		(186		)	—
Total net revenues	170,801		71,480		(186		)	242,095
Adjusted EBITDA (1)	15,664		1,247		(7,433		)	9,478

(1) Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, change in the fair value of contingent consideration liabilities and certain legal settlements, 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 income before income taxes (in thousands):

	Three Months Ended March 31,
	2016			2015
Adjusted EBITDA	$	12,560		$	9,478
Depreciation and amortization	(4,596		)	(4,091		)
Stock-based compensation expense	(1,241		)	(2,061		)
Change in fair value of contingent consideration	(1,911		)	(313		)
Restructuring and other charges	(3,344		)	—
Income from operations	1,468			3,013
Total other expense	(1,224		)	(1,040		)
Income before income taxes	$	244		$	1,973