State of Delaware
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74-2719343
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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1990 Wittington Place
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Farmers Branch, Texas
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75234
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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None
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None
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None
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer x
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Smaller reporting company o
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Emerging growth company o
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Page
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•
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business or economic disruptions or global health concerns may materially and adversely affect our business, financial condition, future results and cash flow;
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•
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macroeconomic conditions and their effect on the general economy and on the U.S. housing market, in particular single family homes, which represent our largest demographic;
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•
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uncertainties in the development of our business strategies, including the rebranding to Brinks Home Security and market acceptance of new products and services;
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•
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the competitive environment in which we operate, in particular, increasing competition in the alarm monitoring industry from larger existing competitors and new market entrants, including well-financed technology, telecommunications and cable companies;
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•
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the development of new services or service innovations by competitors;
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•
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our ability to acquire and integrate additional accounts, including competition for dealers with other alarm monitoring companies which could cause an increase in expected costs of acquiring an account ("Subscriber Acquisition Costs");
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•
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technological changes which could result in the obsolescence of currently utilized technology with the need for significant upgrade expenditures, including the phase out of 2G, 3G and CDMA networks by cellular carriers;
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•
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the trend away from the use of public switched telephone network lines and the resultant increase in servicing costs associated with alternative methods of communication;
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•
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our high degree of leverage and the restrictive covenants governing its indebtedness;
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•
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the operating performance of our network, including the potential for service disruptions at both the main monitoring facility and back-up monitoring facility due to acts of nature or technology deficiencies, and the potential of security breaches related to network or customer information;
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•
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the outcome of any pending, threatened, or future litigation, including potential liability for failure to respond adequately to alarm activations;
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•
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the ability to continue to obtain insurance coverage sufficient to hedge our risk exposures, including as a result of acts of third parties and/or alleged regulatory violations;
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•
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changes in the nature of strategic relationships with original equipment manufacturers, dealers and other of our business partners;
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•
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the reliability and creditworthiness of our independent alarm systems dealers and subscribers;
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•
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changes in our expected rate of subscriber attrition;
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•
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availability of, and our ability to retain, qualified personnel;
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•
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integration of acquired assets and businesses;
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•
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the regulatory environment in which we operate, including the multiplicity of jurisdictions, state and federal consumer protection laws and licensing requirements to which we and/or our dealers are subject and the risk of new regulations, such as the increasing adoption of "false alarm" ordinances; and
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•
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general business conditions and industry trends.
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•
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monitoring services for alarm signals arising from burglaries, fires, medical alerts and other events through security systems at our customers' premises;
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•
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a comprehensive platform of home automation services, including, among other things, remote activation and control of security systems, support for video monitoring, flood sensors, automated garage door and door lock capabilities and thermostat integration;
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•
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hands-free two-way interactive voice communication between our monitoring center and our customers; and
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•
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customer service and technical support related to home monitoring systems and home automation services.
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•
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sales brochures and flyers;
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•
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yard signs;
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•
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window decals;
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•
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customer forms and agreements;
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•
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sales presentation binders;
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•
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door hangers;
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•
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vehicle graphics;
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•
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trade show booths; and
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•
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clothing bearing the Brinks Home Security brand name.
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•
|
continue to develop our dealer position in the market to drive acquisitions of high-quality AMAs;
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•
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leverage our Direct to Consumer Channel to competitively secure new customers;
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•
|
increase home integration, automation and ancillary product offerings; and
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•
|
continue to monitor potential bulk account purchases and accretive merger and acquisition opportunities.
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•
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maintain the high quality of our customer base by continuing to implement our highly disciplined AMA acquisition program;
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•
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continue to motivate our dealers to obtain only high-quality accounts through incentives built into purchase multiples and by having a performance guarantee on substantially all dealer originated accounts;
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•
|
prioritize the inclusion of interactive and home automation services in the AMAs we purchase, which we believe increases customer retention;
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•
|
proactively identifying customers "at-risk" for attrition through new technology initiatives;
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•
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improve customer care and first call resolution;
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•
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continue to implement initiatives to reduce core attrition, which include more effective initial on-boarding of customers, conducting customer surveys at key touchpoints and competitive retention offers for departing customers; and
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•
|
utilize available customer data to actively identify customers who are relocating and target retention of such customers.
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•
|
ADT, Inc. ("ADT");
|
•
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Vivint Smart Home, Inc.;
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•
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Guardian Protection Services, Inc.;
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•
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Vector Security, Inc.;
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•
|
Comcast Corporation;
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•
|
SimpliSafe, Inc.; and
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•
|
Ring LLC.
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•
|
ADT;
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•
|
Guardian Protection Services, Inc.; and
|
•
|
Vector Security, Inc.
|
•
|
subjecting alarm monitoring companies to fines or penalties for false alarms;
|
•
|
imposing fines on alarm subscribers for false alarms;
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•
|
imposing limitations on the number of times the police will respond to false alarms at a particular location;
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•
|
requiring additional verification of intrusion alarms by calling two different phone numbers prior to dispatch ("Enhanced Call Verification"); and
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•
|
requiring visual verification of an actual emergency at the premises before the police will respond to an alarm signal.
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•
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failure to identify attractive acquisition candidates on acceptable terms;
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•
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competition from other bidders;
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•
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inability to raise any required financing; and
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•
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antitrust or other regulatory restrictions, including any requirements that may be imposed by government agencies as a condition to any required regulatory approval.
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•
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make it more difficult for us to satisfy our obligations with respect to our existing and future indebtedness, and any failure to comply with the obligations under any of the agreements governing our indebtedness could result in an event of default under such agreements;
|
•
|
require us to dedicate a substantial portion of any cash flow from operations (which also constitutes substantially all of our cash flow) to the payment of interest and principal due under our indebtedness, which will reduce funds available to fund future subscriber account acquisitions, working capital, capital expenditures and other general corporate requirements;
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•
|
increase our vulnerability to general adverse economic and industry conditions;
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•
|
limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
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•
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limit our ability to obtain additional financing required to fund future subscriber account acquisitions, working capital, capital expenditures and other general corporate requirements;
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•
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expose us to market fluctuations in interest rates;
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•
|
place us at a competitive disadvantage compared to some of our competitors that are less leveraged;
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•
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reduce or delay investments and capital expenditures; and
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•
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cause any refinancing of our indebtedness to be at higher interest rates and require us to comply with more onerous covenants, which could further restrict our business operations.
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•
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incur additional indebtedness;
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•
|
make certain dividends or distributions with respect to any of our capital stock or repurchase any of our capital stock;
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•
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make certain loans and investments;
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•
|
create liens;
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•
|
enter into transactions with affiliates;
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•
|
restrict subsidiary distributions;
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•
|
dissolve, merge or consolidate;
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•
|
make capital expenditures in excess of certain annual limits;
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•
|
transfer, sell or dispose of assets;
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•
|
enter into or acquire certain types of AMAs;
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•
|
make certain amendments to our organizational documents;
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•
|
make changes in the nature of our business;
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•
|
enter into certain burdensome agreements;
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•
|
make accounting changes; and
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•
|
use proceeds of loans to purchase or carry margin stock.
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•
|
key suppliers could terminate their relationship or require financial assurances or enhanced performance;
|
•
|
the ability to renew existing contracts and compete for new business may be adversely affected;
|
•
|
the ability to attract, motivate and/or retain key executives and employees may be adversely affected;
|
•
|
employees may be distracted from performance of their duties or more easily attracted to other employment opportunities; and
|
•
|
competitors may take business away from us, and our ability to attract and retain customers may be negatively impacted.
|
•
|
consequences of our reorganization under Chapter 11 of the Bankruptcy Code, from which we emerged on August 30, 2019;
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•
|
limited trading volume in our common stock;
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•
|
variations in operating results;
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•
|
our involvement in litigation;
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•
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general U.S. or worldwide financial market conditions;
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•
|
announcements by us and our competitors;
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•
|
our liquidity and access to capital;
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•
|
our ability to raise additional funds;
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•
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lack of trading market;
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•
|
changes in government regulations; and
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•
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other events.
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|
High
|
|
Low
|
||||
Common stock:
|
|
|
|
||||
Third quarter (beginning September 5, 2019 and through September 30, 2019)
|
$
|
9.50
|
|
|
$
|
7.00
|
|
Fourth quarter
|
$
|
10.00
|
|
|
$
|
7.50
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||||||
|
December 31,
2019 |
|
|
December 31,
2018 |
|
December 31,
2017 |
|
December 31,
2016 |
|
December 31,
2015 |
||||||||||
Summary Balance Sheet Data (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
$
|
52,279
|
|
|
|
$
|
43,676
|
|
|
$
|
26,615
|
|
|
$
|
26,406
|
|
|
$
|
26,147
|
|
Property and equipment, net of accumulated depreciation
|
$
|
42,096
|
|
|
|
$
|
36,539
|
|
|
$
|
32,789
|
|
|
$
|
28,270
|
|
|
$
|
26,654
|
|
Subscriber accounts, net of accumulated amortization
|
$
|
1,064,311
|
|
|
|
$
|
1,195,463
|
|
|
$
|
1,302,028
|
|
|
$
|
1,386,760
|
|
|
$
|
1,423,538
|
|
Total assets
|
$
|
1,419,312
|
|
|
|
$
|
1,305,768
|
|
|
$
|
1,914,315
|
|
|
$
|
2,033,717
|
|
|
$
|
2,070,267
|
|
Current liabilities
|
$
|
70,247
|
|
|
|
$
|
1,884,207
|
|
|
$
|
98,737
|
|
|
$
|
87,171
|
|
|
$
|
82,715
|
|
Long-term debt, excluding current portion
|
$
|
978,219
|
|
|
|
$
|
—
|
|
|
$
|
1,707,297
|
|
|
$
|
1,687,778
|
|
|
$
|
1,739,147
|
|
Stockholders' equity (deficit)
|
$
|
346,078
|
|
|
|
$
|
(588,975
|
)
|
|
$
|
102,736
|
|
|
$
|
214,945
|
|
|
$
|
201,065
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Summary Statement of Operations Data (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net revenue
|
$
|
162,219
|
|
|
|
$
|
342,286
|
|
|
$
|
540,358
|
|
|
$
|
553,455
|
|
|
$
|
570,372
|
|
|
$
|
563,356
|
|
Operating (loss) income
|
$
|
(3,648
|
)
|
|
|
$
|
47,565
|
|
|
$
|
(494,143
|
)
|
|
$
|
32,304
|
|
|
$
|
67,649
|
|
|
$
|
63,725
|
|
Net (loss) income
|
$
|
(33,331
|
)
|
|
|
$
|
598,413
|
|
|
$
|
(678,750
|
)
|
|
$
|
(111,295
|
)
|
|
$
|
(76,307
|
)
|
|
$
|
(72,448
|
)
|
•
|
enhancing our brand recognition with consumers, which we believe is bolstered by the rebranding to Brinks Home Security,
|
•
|
differentiating and profitably growing our Direct to Consumer Channel under the Brinks Home Security brand,
|
•
|
recruiting and retaining high quality dealers into our Authorized Dealer Program,
|
•
|
assisting new and existing dealers with training and marketing initiatives to increase productivity, and
|
•
|
offering third-party equipment financing to consumers, which is expected to assist in driving account growth at lower creation costs.
|
•
|
improving performance in our Direct to Consumer Channel including generating higher quality leads at favorable cost, increasing sales close rates and enhancing our customer activation process,
|
•
|
negotiating lower subscriber account purchase price multiples in our Dealer Channel, and
|
•
|
expanding the use and availability of third-party financing, which will drive down net creation costs.
|
•
|
maintaining high customer service levels,
|
•
|
effectively managing the credit quality of new customers,
|
•
|
expanding our efforts to both retain customers who have indicated a desire to cancel service and win-back previous customers,
|
•
|
using predictive modeling to identify subscribers with a higher risk of cancellation and engaging with these subscribers to obtain contract extensions on terms favorable to the Company, and
|
•
|
implementing effective pricing strategies.
|
•
|
reducing our operating costs by right sizing the cost structure to the business and leveraging our scale,
|
•
|
increasing use of automation, and
|
•
|
implementing more sophisticated purchasing techniques.
|
|
|
Years Ended December 31,
|
||||
|
|
2019
|
|
2018
|
||
Beginning balance of accounts
|
|
921,750
|
|
|
975,996
|
|
Accounts acquired
|
|
81,386
|
|
|
112,920
|
|
Accounts cancelled
|
|
(150,494
|
)
|
|
(162,579
|
)
|
Cancelled accounts guaranteed by dealer and other adjustments (a)
|
|
(4,884
|
)
|
|
(4,587
|
)
|
Ending balance of accounts
|
|
847,758
|
|
|
921,750
|
|
Monthly weighted average accounts
|
|
884,337
|
|
|
950,705
|
|
Attrition rate - Unit
|
|
17.0
|
%
|
|
17.1
|
%
|
Attrition rate - RMR (b)
|
|
17.9
|
%
|
|
14.9
|
%
|
|
(a)
|
Includes cancelled accounts that are contractually guaranteed to be refunded from holdback.
|
(b)
|
The RMR of cancelled accounts follows the same definition as subscriber unit attrition as noted above. RMR attrition is defined as the RMR of cancelled accounts in a given period, adjusted for the impact of price increases or decreases in that period, divided by the weighted average of RMR for that period.
|
|
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||
|
Non-GAAP Combined Year Ended December 31, 2019
|
|
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||
Net revenue
|
$
|
504,505
|
|
|
|
$
|
162,219
|
|
|
|
$
|
342,286
|
|
|
$
|
540,358
|
|
Cost of services
|
112,274
|
|
|
|
36,988
|
|
|
|
75,286
|
|
|
128,939
|
|
||||
Selling, general and administrative, including stock-based and long-term incentive compensation
|
132,509
|
|
|
|
52,144
|
|
|
|
80,365
|
|
|
118,940
|
|
||||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
|
200,484
|
|
|
|
69,693
|
|
|
|
130,791
|
|
|
211,639
|
|
||||
Interest expense
|
134,060
|
|
|
|
28,979
|
|
|
|
105,081
|
|
|
180,770
|
|
||||
Income (loss) before income taxes
|
567,561
|
|
|
|
(32,627
|
)
|
|
|
600,188
|
|
|
(690,302
|
)
|
||||
Income tax expense (benefit)
|
2,479
|
|
|
|
704
|
|
|
|
1,775
|
|
|
(11,552
|
)
|
||||
Net income (loss)
|
565,082
|
|
|
|
(33,331
|
)
|
|
|
598,413
|
|
|
(678,750
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (a)
|
$
|
266,460
|
|
|
|
$
|
79,087
|
|
|
|
$
|
187,373
|
|
|
$
|
289,448
|
|
Adjusted EBITDA as a percentage of Net revenue
|
52.8
|
%
|
|
|
48.8
|
%
|
|
|
54.7
|
%
|
|
53.6
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Expensed Subscriber acquisition costs, net
|
|
|
|
|
|
|
|
|
|
||||||||
Gross subscriber acquisition costs
|
$
|
38,325
|
|
|
|
$
|
13,381
|
|
|
|
$
|
24,944
|
|
|
$
|
47,874
|
|
Revenue associated with subscriber acquisition costs
|
(7,769
|
)
|
|
|
(2,282
|
)
|
|
|
(5,487
|
)
|
|
(4,678
|
)
|
||||
Expensed Subscriber acquisition costs, net
|
$
|
30,556
|
|
|
|
$
|
11,099
|
|
|
|
$
|
19,457
|
|
|
$
|
43,196
|
|
|
(a)
|
See reconciliation of Net income (loss) to Adjusted EBITDA below.
|
|
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||
|
Non-GAAP Combined Year Ended December 31, 2019
|
|
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||
Net income (loss)
|
$
|
565,082
|
|
|
|
$
|
(33,331
|
)
|
|
|
$
|
598,413
|
|
|
$
|
(678,750
|
)
|
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
|
200,484
|
|
|
|
69,693
|
|
|
|
130,791
|
|
|
211,639
|
|
||||
Depreciation
|
11,125
|
|
|
|
3,777
|
|
|
|
7,348
|
|
|
11,434
|
|
||||
Radio conversion costs
|
4,196
|
|
|
|
3,265
|
|
|
|
931
|
|
|
—
|
|
||||
Stock-based compensation
|
42
|
|
|
|
—
|
|
|
|
42
|
|
|
474
|
|
||||
Long-term incentive compensation
|
774
|
|
|
|
184
|
|
|
|
590
|
|
|
—
|
|
||||
LiveWatch acquisition contingent bonus charges
|
63
|
|
|
|
—
|
|
|
|
63
|
|
|
250
|
|
||||
Legal settlement reserve (related insurance recovery)
|
(4,800
|
)
|
|
|
—
|
|
|
|
(4,800
|
)
|
|
(12,500
|
)
|
||||
Severance expense (a)
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
1,059
|
|
||||
Rebranding marketing program
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
7,410
|
|
||||
Integration / implementation of company initiatives
|
12,545
|
|
|
|
7,702
|
|
|
|
4,843
|
|
|
516
|
|
||||
Gain on revaluation of acquisition dealer liabilities
|
(1,886
|
)
|
|
|
(1,886
|
)
|
|
|
—
|
|
|
(240
|
)
|
||||
Loss on goodwill impairment
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
563,549
|
|
||||
Gain on restructuring and reorganization, net
|
(669,722
|
)
|
|
|
—
|
|
|
|
(669,722
|
)
|
|
—
|
|
||||
Interest expense
|
134,060
|
|
|
|
28,979
|
|
|
|
105,081
|
|
|
180,770
|
|
||||
Realized and unrealized (gain) loss, net on derivative financial instruments
|
6,804
|
|
|
|
—
|
|
|
|
6,804
|
|
|
3,151
|
|
||||
Refinancing expense
|
5,214
|
|
|
|
—
|
|
|
|
5,214
|
|
|
12,238
|
|
||||
Income tax expense (benefit)
|
2,479
|
|
|
|
704
|
|
|
|
1,775
|
|
|
(11,552
|
)
|
||||
Adjusted EBITDA
|
$
|
266,460
|
|
|
|
$
|
79,087
|
|
|
|
$
|
187,373
|
|
|
$
|
289,448
|
|
|
(a)
|
Severance expense for the year ended December 31, 2018 related to a reduction in headcount event.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5 Years
|
|
Total
|
||||||||||
Operating leases
|
$
|
3,963
|
|
|
$
|
6,693
|
|
|
$
|
6,152
|
|
|
$
|
17,264
|
|
|
$
|
34,072
|
|
Long-term debt (a)
|
$
|
8,225
|
|
|
$
|
16,450
|
|
|
$
|
961,769
|
|
|
$
|
—
|
|
|
$
|
986,444
|
|
Interest payments on long-term debt (b)
|
$
|
80,107
|
|
|
$
|
158,167
|
|
|
$
|
97,468
|
|
|
$
|
—
|
|
|
$
|
335,742
|
|
Other (c)
|
$
|
8,301
|
|
|
$
|
220
|
|
|
$
|
568
|
|
|
$
|
3,724
|
|
|
$
|
12,813
|
|
Total contractual obligations
|
$
|
100,596
|
|
|
$
|
181,530
|
|
|
$
|
1,065,957
|
|
|
$
|
20,988
|
|
|
$
|
1,369,071
|
|
|
(c)
|
Primarily represents our holdback liability whereby we withhold payment of a designated percentage of acquisition cost when we acquire subscriber accounts from dealers. The holdback is used as a reserve to cover any terminated subscriber accounts that are not replaced by the dealer during the guarantee period. At the end of the guarantee period, the dealer is responsible for any deficit or is paid the balance of the holdback.
|
Year of Maturity
|
|
Variable Rate Debt
|
||
2020
|
|
$
|
8,225
|
|
2021
|
|
8,225
|
|
|
2022
|
|
8,225
|
|
|
2023
|
|
8,225
|
|
|
2024
|
|
953,544
|
|
|
Thereafter
|
|
—
|
|
|
Total
|
|
$
|
986,444
|
|
|
/s/ KPMG LLP
|
|
|
We have served as the Company's auditor since 2011.
|
|
|
|
Dallas, Texas
|
|
March 30, 2020
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31,
2019 |
|
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
14,763
|
|
|
|
$
|
2,188
|
|
Restricted cash
|
238
|
|
|
|
189
|
|
||
Trade receivables, net of allowance for doubtful accounts of $3,828 in 2019 and $3,759 in 2018
|
12,083
|
|
|
|
13,121
|
|
||
Prepaid and other current assets
|
25,195
|
|
|
|
28,178
|
|
||
Total current assets
|
52,279
|
|
|
|
43,676
|
|
||
Property and equipment, net of accumulated depreciation of $3,777 in 2019 and $40,531 in 2018
|
42,096
|
|
|
|
36,539
|
|
||
Subscriber accounts and deferred contract acquisition costs, net of accumulated amortization of $61,771 in 2019 and $1,621,242 in 2018
|
1,064,311
|
|
|
|
1,195,463
|
|
||
Dealer network and other intangible assets, net of accumulated amortization of $7,922 in 2019 and $0 in 2018
|
136,778
|
|
|
|
—
|
|
||
Goodwill
|
81,943
|
|
|
|
—
|
|
||
Deferred income tax asset, net
|
684
|
|
|
|
783
|
|
||
Operating lease right-of-use asset
|
19,277
|
|
|
|
—
|
|
||
Other assets
|
21,944
|
|
|
|
29,307
|
|
||
Total assets
|
$
|
1,419,312
|
|
|
|
$
|
1,305,768
|
|
Liabilities and Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
$
|
16,869
|
|
|
|
$
|
12,099
|
|
Other accrued liabilities
|
24,954
|
|
|
|
31,085
|
|
||
Deferred revenue
|
12,008
|
|
|
|
13,060
|
|
||
Holdback liability
|
8,191
|
|
|
|
11,513
|
|
||
Current portion of long-term debt
|
8,225
|
|
|
|
1,816,450
|
|
||
Total current liabilities
|
70,247
|
|
|
|
1,884,207
|
|
||
Non-current liabilities:
|
|
|
|
|
|
|
||
Long-term debt
|
978,219
|
|
|
|
—
|
|
||
Long-term holdback liability
|
2,183
|
|
|
|
1,770
|
|
||
Derivative financial instruments
|
—
|
|
|
|
6,039
|
|
||
Operating lease liabilities
|
16,195
|
|
|
|
—
|
|
||
Other liabilities
|
6,390
|
|
|
|
2,727
|
|
||
Total liabilities
|
1,073,234
|
|
|
|
1,894,743
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders' equity (deficit):
|
|
|
|
|
||||
Predecessor common stock, $.01 par value. 1,000 shares authorized, issued and outstanding at December 31, 2018
|
—
|
|
|
|
—
|
|
||
Predecessor additional paid-in capital
|
—
|
|
|
|
439,711
|
|
||
Predecessor accumulated deficit
|
—
|
|
|
|
(1,036,294
|
)
|
||
Predecessor accumulated other comprehensive income, net
|
—
|
|
|
|
7,608
|
|
||
Successor preferred stock, $.01 par value. Authorized 5,000,000 shares; no shares issued
|
—
|
|
|
|
—
|
|
||
Successor common stock, $.01 par value. Authorized 45,000,000 shares; issued and outstanding 22,500,000 shares at December 31, 2019
|
225
|
|
|
|
—
|
|
||
Successor additional paid-in capital
|
379,175
|
|
|
|
—
|
|
||
Successor accumulated deficit
|
(33,331
|
)
|
|
|
—
|
|
||
Successor accumulated other comprehensive income, net
|
9
|
|
|
|
—
|
|
||
Total stockholders' equity (deficit)
|
346,078
|
|
|
|
(588,975
|
)
|
||
Total liabilities and stockholders' equity (deficit)
|
$
|
1,419,312
|
|
|
|
$
|
1,305,768
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Net revenue
|
$
|
162,219
|
|
|
|
$
|
342,286
|
|
|
$
|
540,358
|
|
|
$
|
553,455
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of services
|
36,988
|
|
|
|
75,286
|
|
|
128,939
|
|
|
119,193
|
|
||||
Selling, general and administrative, including stock-based and long-term incentive compensation
|
52,144
|
|
|
|
80,365
|
|
|
118,940
|
|
|
155,902
|
|
||||
Radio conversion costs
|
3,265
|
|
|
|
931
|
|
|
—
|
|
|
450
|
|
||||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
|
69,693
|
|
|
|
130,791
|
|
|
211,639
|
|
|
236,788
|
|
||||
Depreciation
|
3,777
|
|
|
|
7,348
|
|
|
11,434
|
|
|
8,818
|
|
||||
Loss on goodwill impairment
|
—
|
|
|
|
—
|
|
|
563,549
|
|
|
—
|
|
||||
|
165,867
|
|
|
|
294,721
|
|
|
1,034,501
|
|
|
521,151
|
|
||||
Operating (loss) income
|
(3,648
|
)
|
|
|
47,565
|
|
|
(494,143
|
)
|
|
32,304
|
|
||||
Other (income) expense:
|
|
|
|
|
|
|
|
|
||||||||
Gain on restructuring and reorganization, net
|
—
|
|
|
|
(669,722
|
)
|
|
—
|
|
|
—
|
|
||||
Interest expense
|
28,979
|
|
|
|
105,081
|
|
|
180,770
|
|
|
145,492
|
|
||||
Realized and unrealized loss, net on derivative financial instruments
|
—
|
|
|
|
6,804
|
|
|
3,151
|
|
|
—
|
|
||||
Refinancing expense
|
—
|
|
|
|
5,214
|
|
|
12,238
|
|
|
—
|
|
||||
|
28,979
|
|
|
|
(552,623
|
)
|
|
196,159
|
|
|
145,492
|
|
||||
(Loss) income before income taxes
|
(32,627
|
)
|
|
|
600,188
|
|
|
(690,302
|
)
|
|
(113,188
|
)
|
||||
Income tax expense (benefit)
|
704
|
|
|
|
1,775
|
|
|
(11,552
|
)
|
|
(1,893
|
)
|
||||
Net (loss) income
|
(33,331
|
)
|
|
|
598,413
|
|
|
(678,750
|
)
|
|
(111,295
|
)
|
||||
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on derivative contracts, net
|
9
|
|
|
|
(940
|
)
|
|
14,378
|
|
|
1,582
|
|
||||
Total other comprehensive income (loss), net of tax
|
9
|
|
|
|
(940
|
)
|
|
14,378
|
|
|
1,582
|
|
||||
Comprehensive (loss) income
|
$
|
(33,322
|
)
|
|
|
$
|
597,473
|
|
|
$
|
(664,372
|
)
|
|
$
|
(109,713
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted income per share:
|
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(1.48
|
)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(33,331
|
)
|
|
|
$
|
598,413
|
|
|
$
|
(678,750
|
)
|
|
$
|
(111,295
|
)
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of subscriber accounts, deferred contract acquisition costs and other intangible assets
|
69,693
|
|
|
|
130,791
|
|
|
211,639
|
|
|
236,788
|
|
||||
Depreciation
|
3,777
|
|
|
|
7,348
|
|
|
11,434
|
|
|
8,818
|
|
||||
Stock-based and long-term incentive compensation
|
459
|
|
|
|
912
|
|
|
310
|
|
|
3,183
|
|
||||
Deferred income tax expense (benefit)
|
99
|
|
|
|
—
|
|
|
(14,087
|
)
|
|
(4,026
|
)
|
||||
Non-cash legal settlement reserve (related insurance recovery)
|
—
|
|
|
|
—
|
|
|
(2,750
|
)
|
|
23,000
|
|
||||
Amortization of debt discount and deferred debt costs
|
—
|
|
|
|
—
|
|
|
33,452
|
|
|
6,819
|
|
||||
Gain on restructuring and reorganization, net of cash payments
|
(8,143
|
)
|
|
|
(705,559
|
)
|
|
—
|
|
|
—
|
|
||||
Unrealized loss on derivative financial instruments, net
|
—
|
|
|
|
4,577
|
|
|
3,151
|
|
|
—
|
|
||||
Refinancing expense
|
—
|
|
|
|
5,214
|
|
|
12,238
|
|
|
—
|
|
||||
Bad debt expense
|
3,828
|
|
|
|
7,558
|
|
|
12,300
|
|
|
11,014
|
|
||||
Loss on goodwill impairment
|
—
|
|
|
|
—
|
|
|
563,549
|
|
|
—
|
|
||||
Other non-cash activity, net
|
160
|
|
|
|
(462
|
)
|
|
24
|
|
|
(4,291
|
)
|
||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Trade receivables
|
(4,077
|
)
|
|
|
(6,271
|
)
|
|
(12,776
|
)
|
|
(9,790
|
)
|
||||
Prepaid expenses and other assets
|
(4,664
|
)
|
|
|
2,760
|
|
|
(11,046
|
)
|
|
(2,160
|
)
|
||||
Subscriber accounts - deferred contract acquisition costs
|
(585
|
)
|
|
|
(2,193
|
)
|
|
(5,418
|
)
|
|
(3,064
|
)
|
||||
Payables and other liabilities
|
7,141
|
|
|
|
36,690
|
|
|
(18,767
|
)
|
|
(4,792
|
)
|
||||
Net cash provided by operating activities
|
34,357
|
|
|
|
79,778
|
|
|
104,503
|
|
|
150,204
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures
|
(4,523
|
)
|
|
|
(7,100
|
)
|
|
(14,903
|
)
|
|
(14,393
|
)
|
||||
Cost of subscriber accounts acquired
|
(27,325
|
)
|
|
|
(83,814
|
)
|
|
(140,450
|
)
|
|
(142,909
|
)
|
||||
Net cash used in investing activities
|
(31,848
|
)
|
|
|
(90,914
|
)
|
|
(155,353
|
)
|
|
(157,302
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from long-term debt
|
21,000
|
|
|
|
253,100
|
|
|
248,800
|
|
|
187,950
|
|
||||
Payments on long-term debt
|
(28,556
|
)
|
|
|
(379,666
|
)
|
|
(184,100
|
)
|
|
(175,250
|
)
|
||||
Purchase of interest rate cap
|
(3,020
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from equity rights offering
|
—
|
|
|
|
161,497
|
|
|
—
|
|
|
—
|
|
||||
Cash contributed by Ascent Capital
|
—
|
|
|
|
24,139
|
|
|
—
|
|
|
—
|
|
||||
Payments of restructuring and reorganization costs
|
(1,572
|
)
|
|
|
(13,249
|
)
|
|
—
|
|
|
—
|
|
||||
Payments of refinancing costs
|
—
|
|
|
|
(7,404
|
)
|
|
(9,682
|
)
|
|
—
|
|
||||
Value of shares withheld for share-based compensation
|
—
|
|
|
|
(18
|
)
|
|
(93
|
)
|
|
(477
|
)
|
||||
Dividend to Ascent Capital
|
—
|
|
|
|
(5,000
|
)
|
|
(5,000
|
)
|
|
(5,000
|
)
|
||||
Net cash (used in) provided by financing activities
|
(12,148
|
)
|
|
|
33,399
|
|
|
49,925
|
|
|
7,223
|
|
||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(9,639
|
)
|
|
|
22,263
|
|
|
(925
|
)
|
|
125
|
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
24,640
|
|
|
|
2,377
|
|
|
3,302
|
|
|
3,177
|
|
||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
15,001
|
|
|
|
$
|
24,640
|
|
|
$
|
2,377
|
|
|
$
|
3,302
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive
Income (Loss)
|
|
Total Stockholders’ Equity (Deficit)
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2016 (Predecessor Company)
|
1,000
|
|
|
$
|
—
|
|
|
$
|
446,826
|
|
|
$
|
(222,924
|
)
|
|
$
|
(8,957
|
)
|
|
$
|
214,945
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(111,295
|
)
|
|
—
|
|
|
(111,295
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,582
|
|
|
1,582
|
|
|||||
Dividend paid to Ascent Capital
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,981
|
|
|
—
|
|
|
—
|
|
|
2,981
|
|
|||||
Value of shares withheld for minimum tax liability
|
—
|
|
|
—
|
|
|
(477
|
)
|
|
—
|
|
|
—
|
|
|
(477
|
)
|
|||||
Balance at December 31, 2017 (Predecessor Company)
|
1,000
|
|
|
$
|
—
|
|
|
$
|
444,330
|
|
|
$
|
(334,219
|
)
|
|
$
|
(7,375
|
)
|
|
$
|
102,736
|
|
Impact of adoption of Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,720
|
)
|
|
—
|
|
|
(22,720
|
)
|
|||||
Impact of adoption of ASU 2017-12
|
—
|
|
|
—
|
|
|
—
|
|
|
(605
|
)
|
|
605
|
|
|
—
|
|
|||||
Adjusted balance at January 1, 2018 (Predecessor Company)
|
1,000
|
|
|
$
|
—
|
|
|
$
|
444,330
|
|
|
$
|
(357,544
|
)
|
|
$
|
(6,770
|
)
|
|
$
|
80,016
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(678,750
|
)
|
|
—
|
|
|
(678,750
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,378
|
|
|
14,378
|
|
|||||
Dividend paid to Ascent Capital
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
474
|
|
|
—
|
|
|
—
|
|
|
474
|
|
|||||
Value of shares withheld for minimum tax liability
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|||||
Balance at December 31, 2018 (Predecessor Company)
|
1,000
|
|
|
$
|
—
|
|
|
$
|
439,711
|
|
|
$
|
(1,036,294
|
)
|
|
$
|
7,608
|
|
|
$
|
(588,975
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
598,413
|
|
|
—
|
|
|
598,413
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(940
|
)
|
|
(940
|
)
|
|||||
Dividend paid to Ascent Capital
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|
(5,000
|
)
|
|||||
Contribution from Ascent Capital
|
—
|
|
|
—
|
|
|
2,250
|
|
|
—
|
|
|
—
|
|
|
2,250
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||
Value of shares withheld for minimum tax liability
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
Cancellation of Predecessor equity
|
(1,000
|
)
|
|
—
|
|
|
(436,986
|
)
|
|
437,881
|
|
|
(6,668
|
)
|
|
(5,773
|
)
|
|||||
Issuance of Successor common stock
|
22,500,000
|
|
|
225
|
|
|
379,175
|
|
|
—
|
|
|
—
|
|
|
379,400
|
|
|||||
Balance at August 31, 2019 (Predecessor Company)
|
22,500,000
|
|
|
$
|
225
|
|
|
$
|
379,175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at September 1, 2019 (Successor Company)
|
22,500,000
|
|
|
$
|
225
|
|
|
$
|
379,175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379,400
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,331
|
)
|
|
—
|
|
|
(33,331
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Balance at December 31, 2019 (Successor Company)
|
22,500,000
|
|
|
$
|
225
|
|
|
$
|
379,175
|
|
|
$
|
(33,331
|
)
|
|
$
|
9
|
|
|
$
|
346,078
|
|
|
Balance
Beginning
of Period
|
|
Charged
to Expense
|
|
Write-Offs
and Other
|
|
Balance
End of
Period
|
||||||||
Period from September 1, 2019 through December 31, 2019 (Successor Company)
|
$
|
—
|
|
|
$
|
3,828
|
|
|
$
|
—
|
|
|
$
|
3,828
|
|
Period from January 1, 2019 through August 31, 2019 (Predecessor Company)
|
$
|
3,759
|
|
|
$
|
7,558
|
|
|
$
|
(11,317
|
)
|
|
$
|
—
|
|
Year Ended December 31, 2018 (Predecessor Company)
|
$
|
4,162
|
|
|
$
|
12,300
|
|
|
$
|
(12,703
|
)
|
|
$
|
3,759
|
|
Year Ended December 31, 2017 (Predecessor Company)
|
$
|
3,043
|
|
|
$
|
11,014
|
|
|
$
|
(9,895
|
)
|
|
$
|
4,162
|
|
Leasehold improvements
|
15 years or lease term, if shorter
|
Computer systems and software
|
3 - 5 years
|
Furniture and fixtures
|
5 - 7 years
|
2020
|
$
|
178,117
|
|
2021
|
$
|
148,323
|
|
2022
|
$
|
123,515
|
|
2023
|
$
|
102,858
|
|
2024
|
$
|
85,657
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
State taxes paid, net
|
$
|
—
|
|
|
|
$
|
2,637
|
|
|
$
|
2,569
|
|
|
$
|
2,713
|
|
Interest paid
|
$
|
28,467
|
|
|
|
$
|
72,710
|
|
|
$
|
147,632
|
|
|
$
|
138,339
|
|
Accrued capital expenditures
|
$
|
1,804
|
|
|
|
$
|
1,405
|
|
|
$
|
552
|
|
|
$
|
272
|
|
Enterprise value
|
$
|
1,373,400
|
|
Plus: Fair value of non-interest bearing current liabilities
|
61,188
|
|
|
Plus: Fair value of non-interest bearing long-term liabilities
|
26,060
|
|
|
Reorganization value
|
$
|
1,460,648
|
|
|
|
As of August 31, 2019
|
||||||||||||||||||
|
|
Predecessor
Company
|
|
Reorganization
Adjustments
|
|
Ascent Capital
Merger
|
|
Fresh Start
Adjustments
|
|
Successor
Company
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents
|
|
$
|
19,862
|
|
|
$
|
3,604
|
|
(1)
|
$
|
1,139
|
|
(9)
|
$
|
—
|
|
|
$
|
24,605
|
|
Restricted cash
|
|
35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||
Trade receivables, net
|
|
11,834
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,834
|
|
|||||
Prepaid and other current assets
|
|
23,825
|
|
|
—
|
|
|
27
|
|
(9)
|
—
|
|
|
23,852
|
|
|||||
Total current assets
|
|
55,556
|
|
|
3,604
|
|
|
1,166
|
|
|
—
|
|
|
60,326
|
|
|||||
Property and equipment, net
|
|
37,143
|
|
|
—
|
|
|
—
|
|
|
3,808
|
|
(10)
|
40,951
|
|
|||||
Subscriber accounts and deferred contract acquisition costs, net
|
|
1,151,322
|
|
|
—
|
|
|
—
|
|
|
(55,936
|
)
|
(11)
|
1,095,386
|
|
|||||
Dealer network and other intangible assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,700
|
|
(12)
|
144,700
|
|
|||||
Goodwill
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81,943
|
|
(13)
|
81,943
|
|
|||||
Deferred income tax asset, net
|
|
783
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
783
|
|
|||||
Operating lease right-of-use asset
|
|
19,222
|
|
|
—
|
|
|
90
|
|
(9)
|
—
|
|
|
19,312
|
|
|||||
Other assets
|
|
17,932
|
|
|
—
|
|
|
—
|
|
|
(685
|
)
|
(14)
|
17,247
|
|
|||||
Total assets
|
|
$
|
1,281,958
|
|
|
$
|
3,604
|
|
|
$
|
1,256
|
|
|
$
|
173,830
|
|
|
$
|
1,460,648
|
|
Liabilities and Stockholder's Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
|
$
|
13,713
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,713
|
|
Other accrued liabilities
|
|
30,571
|
|
|
(1,070
|
)
|
(2)
|
241
|
|
(9)
|
4,427
|
|
(15)
|
34,169
|
|
|||||
Deferred revenue
|
|
12,646
|
|
|
—
|
|
|
—
|
|
|
(5,331
|
)
|
(16)
|
7,315
|
|
|||||
Holdback liability
|
|
12,516
|
|
|
—
|
|
|
—
|
|
|
(6,525
|
)
|
(17)
|
5,991
|
|
|||||
Current portion of long-term debt
|
|
—
|
|
|
8,225
|
|
(3)
|
—
|
|
|
—
|
|
|
8,225
|
|
|||||
Total current liabilities
|
|
69,446
|
|
|
7,155
|
|
|
241
|
|
|
(7,429
|
)
|
|
69,413
|
|
|||||
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Long-term debt
|
|
199,000
|
|
|
786,775
|
|
(4)
|
—
|
|
|
—
|
|
|
985,775
|
|
|||||
Long-term holdback liability
|
|
1,817
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,817
|
|
|||||
Operating lease liabilities
|
|
16,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,055
|
|
|||||
Other liabilities
|
|
2,175
|
|
|
—
|
|
|
—
|
|
|
6,013
|
|
(15)
|
8,188
|
|
|||||
Total non-current liabilities
|
|
219,047
|
|
|
786,775
|
|
|
—
|
|
|
6,013
|
|
|
1,011,835
|
|
|||||
Liabilities subject to compromise
|
|
1,722,052
|
|
|
(1,722,052
|
)
|
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
|
2,010,545
|
|
|
(928,122
|
)
|
|
241
|
|
|
(1,416
|
)
|
|
1,081,248
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholder's equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Predecessor additional paid-in capital
|
|
436,986
|
|
|
(436,986
|
)
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Predecessor accumulated other comprehensive income, net
|
|
6,668
|
|
|
—
|
|
|
—
|
|
|
(6,668
|
)
|
(18)
|
—
|
|
|||||
Successor common stock
|
|
—
|
|
|
225
|
|
(7)
|
—
|
|
|
—
|
|
|
225
|
|
|||||
Successor additional paid-in capital
|
|
—
|
|
|
379,175
|
|
(7)
|
—
|
|
|
—
|
|
|
379,175
|
|
|||||
(Accumulated deficit) retained earnings
|
|
(1,172,241
|
)
|
|
989,312
|
|
(8)
|
1,015
|
|
(9)
|
181,914
|
|
(18)
|
—
|
|
|||||
Total stockholder's equity (deficit)
|
|
(728,587
|
)
|
|
931,726
|
|
|
1,015
|
|
|
175,246
|
|
|
379,400
|
|
|||||
Total liabilities and stockholder's equity (deficit)
|
|
$
|
1,281,958
|
|
|
$
|
3,604
|
|
|
$
|
1,256
|
|
|
$
|
173,830
|
|
|
$
|
1,460,648
|
|
Equity rights offering proceeds from Noteholders
|
$
|
177,000
|
|
Equity rights offering proceeds from Ascent Capital
|
23,000
|
|
|
Payment of Predecessor Credit Facility principal and interest
|
(165,619
|
)
|
|
Payment of Predecessor DIP Facility principal and interest
|
(28,570
|
)
|
|
Payment of Predecessor Senior Notes principal and interest
|
(2,207
|
)
|
|
Net cash contribution
|
$
|
3,604
|
|
Long-term portion of Successor Takeback Term Loan
|
$
|
814,275
|
|
Payment of Predecessor DIP Facility principal
|
(27,500
|
)
|
|
Net increase in Long-term Debt
|
$
|
786,775
|
|
Predecessor Term Loan
|
$
|
1,072,500
|
|
Predecessor Senior Notes
|
585,000
|
|
|
Predecessor Term Loan accrued interest
|
15,619
|
|
|
Predecessor Senior Notes accrued interest
|
48,933
|
|
|
Total Liabilities subject to compromise
|
$
|
1,722,052
|
|
Liabilities subject to compromise
|
$
|
1,722,052
|
|
Payment of Predecessor Term Loan principal and interest
|
(165,619
|
)
|
|
Payment of Predecessor Senior Notes principal and interest
|
(2,207
|
)
|
|
Issue Successor Takeback Term Loan
|
(822,500
|
)
|
|
Fair value of common stock issued to Predecessor Term Loan and Predecessor Senior Notes holders
|
(171,989
|
)
|
|
Gain on settlement of Liabilities subject to compromise
|
$
|
559,737
|
|
Cancellation of Predecessor additional paid-in capital
|
$
|
436,986
|
|
Loss on equity rights offering discount, net
|
(7,411
|
)
|
|
Gain on settlement of Liabilities subject to compromise
|
559,737
|
|
|
Total adjustment to Retained earnings (accumulated deficit)
|
$
|
989,312
|
|
|
Estimated Useful Life
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
Leasehold improvements
|
9 years
|
|
$
|
353
|
|
|
|
$
|
771
|
|
Computer systems and software
|
2 to 4 years
|
|
39,320
|
|
|
|
83,238
|
|
||
Furniture and fixtures
|
5 years
|
|
1,278
|
|
|
|
2,009
|
|
||
|
|
|
40,951
|
|
|
|
86,018
|
|
||
Accumulated depreciation
|
|
|
—
|
|
|
|
(48,875
|
)
|
||
Property and equipment, net
|
|
|
$
|
40,951
|
|
|
|
$
|
37,143
|
|
Dealer network
|
$
|
140,000
|
|
Leasehold interest
|
4,700
|
|
|
Total Dealer network and other intangible assets
|
$
|
144,700
|
|
Property and equipment fair value adjustment
|
$
|
3,808
|
|
Subscriber accounts fair value adjustment
|
(55,936
|
)
|
|
Dealer network and other intangible assets fair value adjustment
|
144,700
|
|
|
Goodwill
|
81,943
|
|
|
Other assets and liabilities fair value adjustments
|
731
|
|
|
Predecessor accumulated other comprehensive income, net
|
6,668
|
|
|
Net gain on fresh start adjustments
|
$
|
181,914
|
|
|
|
|
|
Period from January 1, 2019 through
August 31, 2019
|
|
Gain on settlement of Liabilities subject to compromise (a)
|
559,737
|
|
Gain on fresh start adjustments (b)
|
181,914
|
|
Loss on equity rights offering discount (c)
|
(8,325
|
)
|
Restructuring and reorganization expense (d)
|
(63,604
|
)
|
Gain on restructuring and reorganization, net
|
669,722
|
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31,
2019 |
|
|
December 31,
2018 |
||||
Property and equipment, net:
|
|
|
|
|
|
|
||
Leasehold improvements
|
$
|
397
|
|
|
|
$
|
771
|
|
Computer systems and software
|
43,915
|
|
|
|
73,283
|
|
||
Furniture and fixtures
|
1,561
|
|
|
|
3,016
|
|
||
|
45,873
|
|
|
|
77,070
|
|
||
Accumulated depreciation
|
(3,777
|
)
|
|
|
(40,531
|
)
|
||
|
$
|
42,096
|
|
|
|
$
|
36,539
|
|
|
|
MONI
|
|
LiveWatch
|
|
Brinks Home Security
|
|
Total
|
||||||||
Balance at December 31, 2017 (Predecessor Company)
|
|
$
|
527,502
|
|
|
$
|
36,047
|
|
|
$
|
—
|
|
|
$
|
563,549
|
|
Goodwill impairment
|
|
(214,400
|
)
|
|
—
|
|
|
—
|
|
|
(214,400
|
)
|
||||
Reporting unit reallocation
|
|
(313,102
|
)
|
|
(36,047
|
)
|
|
349,149
|
|
|
—
|
|
||||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
(349,149
|
)
|
|
(349,149
|
)
|
||||
Balance at December 31, 2018 (Predecessor Company)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Period activity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at August 31, 2019 (Predecessor Company)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Impact of fresh start accounting
|
|
—
|
|
|
—
|
|
|
81,943
|
|
|
81,943
|
|
||||
Balance at August 31, 2019 (Successor Company)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,943
|
|
|
$
|
81,943
|
|
Period activity
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2019 (Successor Company)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81,943
|
|
|
$
|
81,943
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31,
2019 |
|
|
December 31,
2018 |
||||
Accrued payroll and related liabilities
|
$
|
5,908
|
|
|
|
$
|
4,459
|
|
Interest payable
|
291
|
|
|
|
14,446
|
|
||
Income taxes payable
|
2,603
|
|
|
|
2,742
|
|
||
Operating lease liabilities
|
3,725
|
|
|
|
—
|
|
||
Contingent dealer liabilities
|
3,274
|
|
|
|
—
|
|
||
Other
|
9,153
|
|
|
|
9,438
|
|
||
Total Other accrued liabilities
|
$
|
24,954
|
|
|
|
$
|
31,085
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31,
2019 |
|
|
December 31,
2018 |
||||
Successor Takeback Loan Facility, matures March 29, 2024, LIBOR plus 6.50%, subject to a LIBOR floor of 1.25%, with an effective rate of 8.9%
|
$
|
820,444
|
|
|
|
$
|
—
|
|
Successor Term Loan Facility, matures July 3, 2024, LIBOR plus 5.00%, subject to a LIBOR floor of 1.50%, with an effective rate of 7.3%
|
150,000
|
|
|
|
—
|
|
||
Successor Revolving Credit Facility, matures July 3, 2024, LIBOR plus 5.00%, subject to a LIBOR floor of 1.50%, or base rate (with a floor of 4.5%) plus 4.0%, with an effective rate of 12.0%
|
16,000
|
|
|
|
—
|
|
||
9.125% Senior Notes due April 1, 2020 with an effective interest rate of 9.1%
|
—
|
|
|
|
585,000
|
|
||
Ascent Intercompany Loan due October 1, 2020 with an effective rate of 12.5%
|
—
|
|
|
|
12,000
|
|
||
Term loan, matures September 30, 2022, LIBOR plus 5.50%, subject to a LIBOR floor of 1.00%, with an effective rate of 8.6%
|
—
|
|
|
|
1,075,250
|
|
||
$295 million revolving credit facility, matures September 30, 2021, LIBOR plus 4.00%, subject to a LIBOR floor of 1.00%, with an effective rate of 7.5%
|
—
|
|
|
|
144,200
|
|
||
|
$
|
986,444
|
|
|
|
$
|
1,816,450
|
|
Less: Current portion of long-term debt
|
(8,225
|
)
|
|
|
(1,816,450
|
)
|
||
Long-term debt
|
$
|
978,219
|
|
|
|
$
|
—
|
|
2020
|
$
|
8,225
|
|
2021
|
8,225
|
|
|
2022
|
8,225
|
|
|
2023
|
8,225
|
|
|
2024
|
953,544
|
|
|
Thereafter
|
—
|
|
|
Total debt principal payments
|
$
|
986,444
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Effective portion of gain (loss) recognized in Accumulated other comprehensive income (loss)
|
$
|
(62
|
)
|
|
|
$
|
—
|
|
|
$
|
12,882
|
|
|
$
|
(3,842
|
)
|
Effective portion of loss reclassified from Accumulated other comprehensive income (loss) into Net income (loss) (a)
|
$
|
71
|
|
|
|
$
|
(940
|
)
|
|
$
|
(1,496
|
)
|
|
$
|
(5,424
|
)
|
Ineffective portion of amount of gain recognized into Net income (loss) on interest rate swaps (a)
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
88
|
|
|
•
|
Level 1 - Quoted prices for identical instruments in active markets.
|
•
|
Level 2 - Quoted prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are observable in active markets.
|
•
|
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable in any market.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
December 31, 2019 (Successor Company)
|
|
|
|
|
|
|
|
||||||||
Interest rate cap agreement - asset (a)
|
$
|
—
|
|
|
$
|
2,959
|
|
|
$
|
—
|
|
|
$
|
2,959
|
|
Interest rate swap agreements - assets (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest rate swap agreements - liabilities (b)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
—
|
|
|
$
|
2,959
|
|
|
$
|
—
|
|
|
$
|
2,959
|
|
December 31, 2018 (Predecessor Company)
|
|
|
|
|
|
|
|
||||||||
Interest rate cap agreement - asset (a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swap agreements - assets (b)
|
—
|
|
|
10,552
|
|
|
—
|
|
|
10,552
|
|
||||
Interest rate swap agreements - liabilities (b)
|
—
|
|
|
(6,039
|
)
|
|
—
|
|
|
(6,039
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
4,513
|
|
|
$
|
—
|
|
|
$
|
4,513
|
|
|
(a)
|
Interest rate cap asset value is included in non-current Other assets on the consolidated balance sheets.
|
(b)
|
Swap asset values are included in non-current Other assets and Swap liability values are included in non-current Derivative financial instruments on the consolidated balance sheets.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31, 2019
|
|
|
December 31, 2018
|
||||
Long term debt, including current portion:
|
|
|
|
|
||||
Carrying value
|
$
|
986,444
|
|
|
|
$
|
1,816,450
|
|
Fair value (a)
|
$
|
857,717
|
|
|
|
$
|
1,218,606
|
|
|
(a)
|
The fair value is based on market quotations from third-party financial institutions and is classified as Level 2 in the hierarchy.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Current:
|
|
|
|
|
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(426
|
)
|
State
|
604
|
|
|
|
1,775
|
|
|
2,535
|
|
|
2,559
|
|
||||
|
$
|
604
|
|
|
|
$
|
1,775
|
|
|
$
|
2,535
|
|
|
$
|
2,133
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Federal
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
(12,892
|
)
|
|
$
|
(4,593
|
)
|
State
|
100
|
|
|
|
—
|
|
|
(1,195
|
)
|
|
567
|
|
||||
|
$
|
100
|
|
|
|
$
|
—
|
|
|
$
|
(14,087
|
)
|
|
$
|
(4,026
|
)
|
Total Income tax expense (benefit)
|
$
|
704
|
|
|
|
$
|
1,775
|
|
|
$
|
(11,552
|
)
|
|
$
|
(1,893
|
)
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Computed expected tax expense (benefit)
|
$
|
(6,852
|
)
|
|
|
$
|
126,039
|
|
|
$
|
(144,963
|
)
|
|
$
|
(39,616
|
)
|
Change in valuation allowance affecting income tax expense
|
6,958
|
|
|
|
16,769
|
|
|
52,916
|
|
|
39,499
|
|
||||
Cancellation of debt income not taxable
|
—
|
|
|
|
(117,545
|
)
|
|
—
|
|
|
—
|
|
||||
Other restructuring and reorganization income not resulting in tax impact
|
—
|
|
|
|
(36,453
|
)
|
|
—
|
|
|
—
|
|
||||
Non-deductible bankruptcy costs
|
—
|
|
|
|
8,808
|
|
|
—
|
|
|
—
|
|
||||
Goodwill impairment not resulting in tax impact
|
—
|
|
|
|
—
|
|
|
78,869
|
|
|
—
|
|
||||
Other expense (income) not resulting in tax impact
|
42
|
|
|
|
2,755
|
|
|
568
|
|
|
1,211
|
|
||||
Tax amortization of indefinite-lived assets
|
—
|
|
|
|
—
|
|
|
—
|
|
|
4,001
|
|
||||
2017 Federal tax reform enactment
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(9,020
|
)
|
||||
State and local income taxes, net of federal income taxes
|
556
|
|
|
|
1,402
|
|
|
1,058
|
|
|
2,032
|
|
||||
Total Income tax expense (benefit)
|
$
|
704
|
|
|
|
$
|
1,775
|
|
|
$
|
(11,552
|
)
|
|
$
|
(1,893
|
)
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31,
2019 |
|
|
December 31,
2018 |
||||
Accounts receivable reserves
|
$
|
1,008
|
|
|
|
$
|
1,205
|
|
Accrued liabilities
|
4,395
|
|
|
|
3,564
|
|
||
Net operating loss ("NOL") carryforwards
|
111,512
|
|
|
|
194,976
|
|
||
Derivative financial instruments
|
—
|
|
|
|
1,770
|
|
||
Other deferred tax assets
|
7,540
|
|
|
|
1,911
|
|
||
Valuation allowance
|
(24,457
|
)
|
|
|
(148,419
|
)
|
||
Total deferred tax assets
|
$
|
99,998
|
|
|
|
$
|
55,007
|
|
Intangible assets
|
(96,204
|
)
|
|
|
(52,161
|
)
|
||
Property, plant and equipment
|
(3,110
|
)
|
|
|
(2,063
|
)
|
||
Total deferred tax liabilities
|
$
|
(99,314
|
)
|
|
|
$
|
(54,224
|
)
|
Net deferred tax assets
|
$
|
684
|
|
|
|
$
|
783
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
As of the beginning of the year
|
$
|
5,629
|
|
|
|
$
|
205
|
|
|
$
|
204
|
|
|
$
|
208
|
|
Increases for tax positions of current years
|
—
|
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
Reductions for tax positions of prior years
|
—
|
|
|
|
—
|
|
|
(6
|
)
|
|
(4
|
)
|
||||
Increase from Ascent downstream merger
|
—
|
|
|
|
5,424
|
|
|
—
|
|
|
—
|
|
||||
As of the end of the year
|
$
|
5,629
|
|
|
|
$
|
5,629
|
|
|
$
|
205
|
|
|
$
|
204
|
|
|
Series A
Common Stock Options
|
|
WAEP
|
|||
Outstanding at January 1, 2019 (Predecessor Company)
|
14,600
|
|
|
$
|
50.47
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(3,000
|
)
|
|
$
|
50.47
|
|
Expired
|
(11,600
|
)
|
|
$
|
50.47
|
|
Outstanding at August 31, 2019 (Predecessor Company)
|
—
|
|
|
$
|
—
|
|
Exercisable at August 31, 2019 (Predecessor Company)
|
—
|
|
|
$
|
—
|
|
|
Series A
Restricted Stock Awards
|
|
WAFV
|
|||
Outstanding at January 1, 2019 (Predecessor Company)
|
15,023
|
|
|
$
|
15.20
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Vested
|
(15,023
|
)
|
|
$
|
15.20
|
|
Cancelled
|
—
|
|
|
$
|
—
|
|
Outstanding at August 31, 2019 (Predecessor Company)
|
—
|
|
|
$
|
—
|
|
|
Series A
Restricted Stock Units |
|
WAFV
|
|||
Outstanding at January 1, 2019 (Predecessor Company)
|
487,489
|
|
|
$
|
5.52
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Vested
|
(8,438
|
)
|
|
$
|
22.39
|
|
Cancelled
|
(479,051
|
)
|
|
$
|
5.22
|
|
Outstanding at August 31, 2019 (Predecessor Company)
|
—
|
|
|
$
|
—
|
|
|
Accumulated Other Comprehensive Income (Loss)
|
||
Balance at December 31, 2016 (Predecessor Company)
|
$
|
(8,957
|
)
|
Unrealized loss on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (a)
|
(3,842
|
)
|
|
Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (b)
|
5,424
|
|
|
Net period other comprehensive income
|
1,582
|
|
|
Balance at December 31, 2017 (Predecessor Company)
|
$
|
(7,375
|
)
|
Impact of adoption of ASU 2017-12
|
605
|
|
|
Adjusted balance at January 1, 2018 (Predecessor Company)
|
$
|
(6,770
|
)
|
Unrealized gain on derivatives recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (a)
|
12,882
|
|
|
Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (b)
|
1,496
|
|
|
Net period other comprehensive income
|
14,378
|
|
|
Balance at December 31, 2018 (Predecessor Company)
|
$
|
7,608
|
|
Reclassifications of unrealized loss on derivatives into Net loss, net of income tax of $0 (b)
|
(940
|
)
|
|
Balance at August 31, 2019 (Predecessor Company)
|
$
|
6,668
|
|
Impact of fresh start accounting (c)
|
(6,668
|
)
|
|
Balance at August 31, 2019 (Successor Company)
|
$
|
—
|
|
Unrealized loss on interest rate cap recognized through Accumulated other comprehensive income (loss), net of income tax of $0 (a)
|
(62
|
)
|
|
Interest cost of interest rate cap reclassified into Net loss, net of income tax of $0 (b)
|
71
|
|
|
Net period other comprehensive income
|
9
|
|
|
Balance at December 31, 2019 (Successor Company)
|
$
|
9
|
|
|
(a)
|
No income taxes were recorded on the unrealized gain / (loss) on derivative instrument amounts for 2019, 2018 and 2017 because the Company is subject to a full valuation allowance.
|
(b)
|
Amounts reclassified into Net loss are included in Interest expense on the consolidated statements of operations and comprehensive income (loss). See Note 10, Derivatives for further information.
|
(c)
|
The remaining amount recognized in Accumulated other comprehensive income (loss) was evaluated to have no fair value upon the application of fresh start accounting pursuant to the Plan. See Note 4, Fresh Start Accounting for further information.
|
|
Successor Company
|
|
|
Predecessor Company
|
||||||||||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||
Alarm monitoring revenue
|
$
|
147,646
|
|
|
|
$
|
319,172
|
|
|
$
|
498,236
|
|
|
$
|
537,399
|
|
Product, installation and service revenue
|
12,671
|
|
|
|
19,111
|
|
|
38,455
|
|
|
12,308
|
|
||||
Other revenue
|
1,902
|
|
|
|
4,003
|
|
|
3,667
|
|
|
3,748
|
|
||||
Total Net revenue
|
$
|
162,219
|
|
|
|
$
|
342,286
|
|
|
$
|
540,358
|
|
|
$
|
553,455
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
December 31,
2019 |
|
|
December 31,
2018 |
||||
Trade receivables, net
|
$
|
12,083
|
|
|
|
$
|
13,121
|
|
Contract assets, net - current portion (a)
|
$
|
12,070
|
|
|
|
$
|
13,452
|
|
Contract assets, net - long-term portion (b)
|
$
|
14,852
|
|
|
|
$
|
16,154
|
|
Deferred revenue
|
$
|
12,008
|
|
|
|
$
|
13,060
|
|
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
||||
Operating lease cost (a)
|
$
|
160
|
|
|
|
$
|
321
|
|
Operating lease cost (b)
|
1,281
|
|
|
|
2,595
|
|
||
Total operating lease cost
|
$
|
1,441
|
|
|
|
$
|
2,916
|
|
|
|
As of December 31, 2019
|
|
Weighted-average remaining lease term for operating leases (in years)
|
9.5
|
|
Weighted-average discount rate for operating leases
|
11.7
|
%
|
|
Successor Company
|
|
|
Predecessor Company
|
||||
|
Period from September 1, 2019 through December 31, 2019
|
|
|
Period from January 1, 2019 through August 31, 2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
||||
Lease payments included in cash flows from operating activities (a)
|
$
|
1,404
|
|
|
|
$
|
2,804
|
|
Right-of-use assets obtained in exchange for new:
|
|
|
|
|
||||
Operating lease liabilities
|
$
|
543
|
|
|
|
$
|
91
|
|
|
2020
|
$
|
3,963
|
|
2021
|
3,416
|
|
|
2022
|
3,277
|
|
|
2023
|
3,087
|
|
|
2024
|
3,065
|
|
|
Thereafter
|
17,264
|
|
|
Total lease payments
|
$
|
34,072
|
|
Less: Interest
|
(14,152
|
)
|
|
Total lease obligations
|
$
|
19,920
|
|
2019
|
$
|
4,628
|
|
2020
|
4,207
|
|
|
2021
|
3,093
|
|
|
2022
|
3,068
|
|
|
2023
|
3,087
|
|
|
Thereafter
|
20,329
|
|
|
Total lease payments
|
$
|
38,412
|
|
|
Predecessor Company
|
|
|
Successor Company
|
||||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
Period from July 1, 2019 through August 31, 2019
|
|
|
Period from September 1, 2019 through September 30, 2019
|
|
4th Quarter
|
||||||||||
2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net revenue
|
$
|
129,606
|
|
|
$
|
128,091
|
|
|
$
|
84,589
|
|
|
|
$
|
36,289
|
|
|
$
|
125,930
|
|
Operating income (loss)
|
$
|
19,321
|
|
|
$
|
19,133
|
|
|
$
|
9,111
|
|
|
|
$
|
(3,129
|
)
|
|
$
|
(519
|
)
|
Net loss
|
$
|
(31,770
|
)
|
|
$
|
(54,202
|
)
|
|
$
|
684,385
|
|
|
|
$
|
(10,807
|
)
|
|
$
|
(22,524
|
)
|
Basic and diluted net loss per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
(0.48
|
)
|
|
$
|
(1.00
|
)
|
|
Predecessor Company
|
||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net revenue
|
$
|
133,753
|
|
|
$
|
135,013
|
|
|
$
|
137,156
|
|
|
$
|
134,436
|
|
Operating income (loss)
|
$
|
12,012
|
|
|
$
|
(201,845
|
)
|
|
$
|
12,280
|
|
|
$
|
(316,590
|
)
|
Net loss
|
$
|
(26,207
|
)
|
|
$
|
(241,792
|
)
|
|
$
|
(33,840
|
)
|
|
$
|
(376,911
|
)
|
Basic and diluted net loss per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Page No.
|
2.1
|
|
|
2.2
|
|
|
2.3
|
|
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
21
|
|
|
24
|
|
|
31.1
|
|
|
31.2
|
|
|
32
|
|
|
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 Labels Linkbase Document. *
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document. *
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
MONITRONICS INTERNATIONAL, INC.
|
|
|
|
|
|
Dated:
|
March 30, 2020
|
By
|
/s/ William E. Niles
|
|
|
|
William E. Niles
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William E. Niles
|
|
Chief Executive Officer (principal executive officer)
|
|
March 30, 2020
|
William E. Niles
|
|
|
|
|
|
|
|
|
|
/s/ Patrick J. Bartels, Jr.
|
|
Director
|
|
March 30, 2020
|
Patrick J. Bartels, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Stephen Escudier
|
|
Director
|
|
March 30, 2020
|
Stephen Escudier
|
|
|
|
|
|
|
|
|
|
/s/ Mitchell G. Etess
|
|
Director
|
|
March 30, 2020
|
Mitchell G. Etess
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Kneeland
|
|
Director
|
|
March 30, 2020
|
Michael J. Kneeland
|
|
|
|
|
|
|
|
|
|
/s/ Michael R. Meyers
|
|
Director
|
|
March 30, 2020
|
Michael R. Meyers
|
|
|
|
|
|
|
|
|
|
/s/ Dick Seger
|
|
Director
|
|
March 30, 2020
|
Dick Seger
|
|
|
|
|
|
|
|
|
|
/s/ Fred A. Graffam
|
|
Chief Financial Officer, Executive Vice President and Assistant Secretary (principal financial and accounting officer)
|
|
March 30, 2020
|
Fred A. Graffam
|
|
|
|
Subsidiary
|
|
Jurisdiction of Formation
|
Monitronics International, Inc.
|
|
Delaware
|
|
|
|
Monitronics Canada, Inc.
|
|
Delaware
|
|
|
|
MI Servicer LP, LLC
|
|
Delaware
|
|
|
|
MIBU Servicer, Inc.
|
|
Delaware
|
|
|
|
Monitronics Security LP
|
|
Delaware
|
|
|
|
Monitronics Funding LP
|
|
Delaware
|
|
|
|
Platinum Security Solutions, Inc.
|
|
Delaware
|
|
|
|
Security Networks LLC
|
|
Florida
|
|
|
|
LiveWatch Security, LLC
|
|
Delaware
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William E. Niles
|
|
Chief Executive Officer of Monitronics International, Inc. (principal executive officer)
|
|
March 30, 2020
|
William E. Niles
|
|
|
|
|
|
|
|
|
|
/s/ Patrick J. Bartels, Jr.
|
|
Director of Monitronics International, Inc.
|
|
March 30, 2020
|
Patrick J. Bartels, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Stephen Escudier
|
|
Director of Monitronics International, Inc.
|
|
March 30, 2020
|
Stephen Escudier
|
|
|
|
|
|
|
|
|
|
/s/ Mitchell G. Etess
|
|
Director of Monitronics International, Inc.
|
|
March 30, 2020
|
Mitchell G. Etess
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Kneeland
|
|
Director of Monitronics International, Inc.
|
|
March 30, 2020
|
Michael J. Kneeland
|
|
|
|
|
|
|
|
|
|
/s/ Michael R. Meyers
|
|
Director of Monitronics International, Inc.
|
|
March 30, 2020
|
Michael R. Meyers
|
|
|
|
|
|
|
|
|
|
/s/ Dick Seger
|
|
Director of Monitronics International, Inc.
|
|
March 30, 2020
|
Dick Seger
|
|
|
|
|
|
|
|
|
|
/s/ Fred A. Graffam
|
|
Chief Financial Officer, Executive Vice President and Assistant Secretary (principal financial and accounting officer)
|
|
March 30, 2020
|
Fred A. Graffam
|
|
|
|
|
|
|
|
|
|
Date:
|
March 30, 2020
|
|
|
|
|
|
|
|
/s/ William E. Niles
|
|
|
William E. Niles
|
|
|
Chief Executive Officer (principal executive officer)
|
|
Date:
|
March 30, 2020
|
|
|
|
|
|
|
|
/s/ Fred A. Graffam
|
|
|
Fred A. Graffam
|
|
|
Chief Financial Officer, Executive Vice President and Assistant Secretary (principal financial and accounting officer)
|
|
Dated:
|
March 30, 2020
|
|
/s/ William E. Niles
|
|
|
William E. Niles
|
|
|
|
Chief Executive Officer (principal executive officer)
|
|
|
|
|
|
Dated:
|
March 30, 2020
|
|
/s/ Fred A. Graffam
|
|
|
Fred A. Graffam
|
|
|
|
Chief Financial Officer, Executive Vice President and Assistant Secretary
|
|
|
|
(principal financial and accounting officer)
|