Segment and Geographic Reporting

12 Months Ended

Dec. 31, 2013

Segment and Geographic Reporting [Abstract]

Segment and Geographic Reporting

Note 18 - Segment and Geographic Reporting

The Company’s service offerings include brand development and brand deployment services related to four core competencies: graphic services, brand and package strategy and design, digital promotion and advertising, and software. Graphic services, brand strategy and design and digital promotion and advertising represented approximately 96 percent of the Company’s revenues in 2013, with software sales representing the remaining 4 percent. The nature of the Company’s core service offerings creates significant overlap across competencies such that it is impracticable to report revenues for each of its service offerings.

These services are provided to clients primarily in the consumer packaged goods, retail and life sciences markets. In 2013 and 2012, the Company’s largest client accounted for approximately $43,872, or 9.9 percent, and $35,739, or 8.1 percent, respectively, of its total revenues. In 2013 and 2012, the 10 largest clients in the aggregate accounted for 48.4 percent and 46.9 percent, respectively, of revenues. The Company’s services are provided with an employment force of approximately 3,600 employees worldwide, of which approximately 7 percent are production employees represented by labor unions. The percentage of employees covered by union contracts that expire within one year is approximately 2 percent.

The Company organizes and manages its operations primarily by geographic area and measures profit and loss of its segments based on operating income (loss). The accounting policies used to measure operating income of the segments are the same as those used to prepare the consolidated financial statements.

Accounting guidance requires that a public business enterprise report financial information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance.

The Company’s Americas segment includes all of the Company’s operations located in North and South America, including its operations in the United States, Canada, Mexico and Brazil, its U.S. branding and design capabilities and its U.S. digital solutions business. The Company’s Europe segment includes all operations located in Europe, including its European branding and design capabilities and its digital solutions business in London. The Company’s Asia Pacific segment includes all operations in Asia and Australia, including its Asia Pacific branding and design capabilities. The Company has determined that each of its operating segments is also a reportable segment.

Corporate consists of unallocated general and administrative activities and associated expenses, including executive, legal, finance, information technology, human resources and certain facility costs. In addition, certain costs and employee benefit plans are included in Corporate and not allocated to operating segments.

The Company has disclosed operating income (loss) as the primary measure of segment profitability.  This is the measure of profitability used by the Company’s CODM and is most consistent with the presentation of profitability reported within the consolidated financial statements.

The segment revenue disclosure for the years ended December 31, 2012 and December 31, 2011 have been reclassified to conform to the current presentation of segment revenue as presented for the year ended December 31, 2013. The Americas segment revenue and intersegment revenue elimination originally reported for the year ended December 31, 2012 and December 31, 2011, have been reduced by $30,051 and $25,859, respectively, to reflect the elimination of intra-segment revenue within the Americas segment.

Segment information relating to results of operations from continuing operations was as follows:

	2013			2012			2011
Net revenues:
Americas	$	331,380		$	333,494		$	330,879
Europe		87,176			85,763			75,877
Asia Pacific		42,454			38,923			33,704
Intersegment revenue elimination		(18,370	)		(16,898	)		(13,039	)
Total	$	442,640		$	441,282		$	427,421
Operating segment income (loss):
Americas	$	57,566		$	10,523		$	48,628
Europe		5,488			979			6,384
Asia Pacific		3,196			2,124			4,198
Corporate		(42,061	)		(44,593	)		(33,890	)
Operating income (loss)		24,189			(30,967	)		25,320
Interest expense, net		(4,069	)		(3,523	)		(5,211	)
Income (loss) from continuing operations, before income taxes	$	20,120		$	(34,490	)	$	20,109
Depreciation and amortization expense:
Americas	$	9,054		$	9,406		$	9,287
Europe		2,651			3,206			2,903
Asia Pacific		1,430			1,532			1,292
Corporate		5,001			3,272			2,849
Total	$	18,136		$	17,416		$	16,331

The Corporate operating loss for 2013 includes $7,488 of business systems integration expense, related to the Company’s information technology and business process improvement initiative. In addition, the Corporate operating loss for 2013 includes a credit to income of approximately $518 for the reversal of a liability recorded in purchase accounting for a recent acquisition that is no longer needed due to statute expiration.

The Americas operating income for 2012 includes $31,683 of multiemployer pension withdrawal expense. The 2012 expense represents an estimated withdrawal liability recorded at December 31, 2012, pursuant to the Company’s decision to withdraw from the GCC/IBT National Pension Fund.

The Corporate operating loss for 2012 includes $12,086 of business systems integration expense, related to the Company’s information technology and business process improvement initiative.

The Corporate operating loss for 2011 includes $8,467 of business and systems integration expense, related to the Company’s information technology and business process improvement initiative, and $1,846 of multiemployer pension withdrawal expense. Partially offsetting the expense increases were credits to income of $3,320 for the reduction of contingent consideration payable related to a 2010 acquisition and $825 related to the reduction of an employment tax reserve for a 2008 acquisition.

Segment information related to total assets and expenditure for long-lived assets was as follows:
	2013		2012
Total Assets:
Americas (1)	$	326,745	$	359,014
Europe		57,119		54,746
Asia Pacific		24,813		27,193
Corporate		21,864		17,868
Total	$	430,541	$	458,821

(1)   Decrease in total assets for the Americas segment includes $8,444 for the sale of net assets of large-format printing operation, $7,210 for the write-off of goodwill and other intangible assets related to the large-format printing operation and $7,307 for the transfer of real estate related to the large-format printing operation to the Corporate segment.

	2013		2012		2011
Expenditures for long-lived assets:
Americas	$	5,211	$	5,648	$	7,176
Europe		2,111		1,256		1,813
Asia Pacific		825		1,611		1,108
Corporate		5,030		9,615		14,546
Total	$	13,177	$	18,130	$	24,643

Summary financial information by geographic location for 2013, 2012 and 2011 is as follows:

	United States		Canada		Europe		Other		Total
2013
Revenues	$	292,215	$	29,651	$	84,963	$	35,811	$	442,640
Long-lived assets	$	53,972	$	2,013	$	5,589	$	5,651	$	67,225
2012
Revenues	$	293,600	$	30,570	$	83,857	$	33,254	$	441,282
Long-lived assets	$	55,582	$	1,812	$	4,808	$	5,152	$	67,354
2011
Revenues	$	294,118	$	29,939	$	74,741	$	28,623	$	427,421
Long-lived assets	$	50,032	$	2,335	$	5,008	$	5,463	$	62,838

Sales are attributed to countries based on the point of origin of the sale. Approximately 9.9 percent of total revenues came from the Company’s largest single client for the year ended December 31, 2013.

Long-lived assets include property, plant and equipment assets stated at net book value and other non-current assets that are identified with the operations in each country.