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Subsequent Events (Notes)
12 Months Ended
Dec. 31, 2014
Subsequent Event [Line Items]  
Subsequent Events [Text Block]
Note 21. Subsequent Events

PartyLite has in recent years manufactured substantially all of its candles at its facilities in Batavia, Illinois and Cumbria, United Kingdom. On January 13, 2015, as part of the Company's efforts to centralize PartyLite’s manufacturing operations and reduce duplication of functions, the Company's Board of Directors approved PartyLite’s creation of a “Global Center of Excellence” in Batavia, Illinois and the closing of its manufacturing facility located in Cumbria, United Kingdom. The closure of this facility is scheduled to commence in the first quarter of 2015. As of December 31, 2014, the Company has recorded a one-time fixed asset impairment of $0.6 million on certain machinery and equipment located at the Cumbria, United Kingdom facility. All assets have been classified as held and used as of December 31, 2014 as the facility can not be sold in its present condition and there have been no plans to market it. The Company estimates that closing PartyLite’s Cumbria facility will result in total annualized savings of $8.0 million, or $40.0 million over the next five years.  In addition, the Company estimates that it will incur pre-tax one-time and transitional costs of $6.0 million in the first half of 2015, composed of $2.6 million to shut down the Cumbria facility (including severance costs and equipment removal), $1.2 million for continued overhead at Cumbria while manufacturing is transitioned to Batavia, $1.0 million of capital expenditures and $1.2 million of miscellaneous costs (e.g., equipment upgrades).  The Company does not anticipate that there will be any further material future cash expenditures associated with the closure of the Cumbria manufacturing facility.

On February 9, 2015, the Company announced that its Silver Star Brands business unit acquired certain of the assets of Native Remedies® LLC at a purchase price of $5.0 million. Native Remedies is a direct-to-consumer eCommerce marketer of natural herbal dietary supplements and homeopathic products. The Native Remedies brand will become part of Silver Star Brands. Financial results from the date of the acquisition will be included in the Company's Catalog & Internet segment for reporting purposes.

On March 9, 2015, the Company, together with all of its domestic subsidiaries, except the subsidiary through which it holds its interest in ViSalus (collectively, the “domestic subsidiaries”), entered into a Term Loan and Security Agreement with GFIE, LLC, as term lender. The agreement provides for a five-year term loan in an original principal amount equal to $35.0 million. The obligations under the agreement are secured by, among other assets, (i) a first priority lien on and security interest in PartyLite’s manufacturing facility in Batavia, IL and the intellectual property and various stock and other equity interests owned by the Company and the domestic subsidiaries and (ii) a second priority lien on and security interest in the Company's and the domestic subsidiaries' accounts receivable, inventory, chattel paper, and deposit and securities accounts and PartyLite’s office building in Plymouth, MA. The term loan bears interest at a non-default rate of the greater of 1.00% or LIBOR, in each case plus 5%, payable quarterly in arrears. The principal amount of the term loan will be paid in installments as follows: beginning on March 31, 2016, and continuing on the last day of each calendar quarter thereafter, up to and including December 31, 2019, the Company will pay equal quarterly installments of $437.5 thousand. The entire remaining balance of principal and accrued interest on the term loan, and all other charges and/or amounts then due in connection with the term loan, will be due and payable in full on March 9, 2020. The term loan may be prepaid, in whole or in part, from time to time, without penalty or premium. In addition, commencing in 2017 (based on our 2016 results), the Company is required to prepay the term loan annually in an amount up to 25% of “excess cash flow,” if any. For these purposes, excess cash flow is the Company's consolidated EBITDA for the most recently completed fiscal year, determined as set forth in the term loan, less certain capital expenditures, certain repayments of debt, certain interest expenses, and certain cash and other expenditures.

The term loan contains covenants that restrict, subject to certain exceptions, the Company's and all of its subsidiaries' ability to, among other things: (i) incur indebtedness; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) engage in certain dispositions or acquisitions of assets; (v) make investments, loans, guarantees or advances; (vi) pay dividends and distributions or repurchase its common stock; (vii) repay or prepay certain indebtedness; (viii) enter into sale and leaseback transactions; (ix) engage in certain transactions with affiliates; and (x) change the nature of its or any of its subsidiaries’ business. In addition, the term loan (a) requires the Company to maintain a fixed charge coverage ratio (“FCCR”) of 1.0 to 1.0 upon the occurrence of certain events or conditions, (b) with certain exceptions, prohibits the Company from making acquisitions if the FCCR is less than 1.0 to 1.0, and (c) among other conditions, generally prohibits the Company from paying dividends or repurchasing its common stock:

• for amounts in excess of $2.5 million in any twelve-month period;
• at times when there are no loans outstanding under the revolving loan agreement, if availability (on a pro forma basis) is less than $3.0 million; and
• at times when there are loans outstanding under the revolving loan agreement, if (a) availability (on a pro forma basis) is less than the greater of 30.0% of the revolving loan commitment or $2.25 million, (b) immediately after such dividend or repurchase, availability (on a pro forma basis) would be less than the greater of 30.0% of the revolving loan commitment or $2.25 million or (c) the FCCR is less than 1.1 to 1.0.

The Company estimates that its FCCR was less than 1.0 to 1.0 at February 28, 2015. The term loan agreement also contains additional affirmative, negative and financial covenants and events of default.

The proceeds of the term loan, together with available cash, were used to fund the mandatory redemption of the 6.00% Senior Notes.

On March 9, 2015, the Company and the domestic subsidiaries also entered into a Loan and Security Agreement, which it refers to as the revolving loan agreement, with Bank of America, N.A., as revolver lender. The revolving loan agreement provides for an asset-based five-year revolving line of credit facility in an aggregate principal amount up to the lesser of $15.0 million or an amount determined by reference to a “borrowing base,” which deducts such reserves as the revolver lender may require in its reasonable discretion. The Company's borrowing base under the revolving loan agreement will be comprised principally of specified percentages of eligible inventory, accounts receivables and (once a required appraisal is received) PartyLite’s office building in Plymouth, MA. The obligations under the revolving loan agreement are secured by, among other assets, (i) a first priority lien on and security interest in the Company's and the domestic subsidiaries' accounts receivable, inventory, chattel paper and deposit and securities accounts, as well as PartyLite’s office building in Plymouth, MA, and (ii) a second priority lien on and security interest in various other assets of the Company and the domestic subsidiaries, including PartyLite’s manufacturing facility in Batavia, IL, and its and the domestic subsidiaries' intellectual property and various stock and other equity interests.

The Company estimates that, based on the value of eligible inventory, accounts receivable and PartyLite’s office building in Plymouth, MA, as of January 31, 2015, subject to the receipt of the appraisal of that facility, its borrowing base would have been approximately $13.0 million. As of the date hereof, the Company has not made any borrowings under the revolving loan agreement and has outstanding thereunder only an existing letter of credit for approximately $1.1 million.

Loans under the revolving loan agreement will bear non-default interest at a rate equal to either (i) LIBOR plus an applicable margin ranging from 1.75% to 2.25% or (ii) a base rate equal, at the time of determination, to the greater of (a) the revolver lender’s prime rate; (b) the Federal Funds Rate (as defined) plus 0.50%; or (c) LIBOR for a 30 day interest period plus 1.00%, in each case plus an applicable margin ranging from 0.75% to 1.25%. All loans under the revolving loan agreement will be due and payable in full on March 9, 2020, and may be prepaid, in whole or in part, from time to time, without penalty or premium (except as may be necessary to cover certain funding losses in connection with LIBOR loans). If an overadvance, as determined pursuant to the revolving loan agreement, exists at any time, or accounts receivable are disposed of, the Company will be required to repay a portion of the loans under the revolving loan agreement determined as set forth in the revolving loan agreement.

The revolving loan agreement contains affirmative, negative and financial covenants that are substantially similar to those contained in the term loan agreement and that restrict and impose obligations on the Company and the domestic subsidiaries in the same manner. The revolving loan agreement also contains events of default that are substantially similar to those contained in the term loan agreement.

Loans under the revolving loan agreement will be used primarily for working capital and other general corporate purposes.
The relative rights of the term lender and the revolver lender with respect to their respective liens and remedies are governed by an intercreditor agreement.

The term loan agreement and the intercreditor agreement involve related parties since the term lender is owned by Robert B. Goergen, our executive Chairman of the Board, and Pamela Goergen, Mr. Goergen’s wife and a former member of the Company's board of directors. The term loan was approved by a special committee of the Company's Board of Directors comprised solely of independent directors.  The special committee received legal advice from Wachtell, Lipton, Rosen & Katz and a fairness opinion from Duff & Phelps.