Overview, Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates—The preparation of financial statements in conformity with GAAP requires the extensive use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. The Company’s significant accounting policies and critical accounting estimates are disclosed in the Annual Report.

Inventories

Inventory—The components of the Company’s inventories stated at the lower of cost or market, net of excess and obsolescence reserves for raw materials, at June 30, 2021 and December 31, 2020 were as follows:  

	June 30, 2021		December 31, 2020
Raw materials and manufacturing supplies	$	1.5	$	2.5
Work in process		2.8		2.4
Total	$	4.3	$	4.9

Property, Plant and Equipment

Property, Plant and Equipment—The components of the Company’s property, plant and equipment, net at June 30, 2021 and December 31, 2020 were as follows:

	June 30, 2021			December 31, 2020
Land	$	0.3		$	0.3
Buildings		20.2			24.1
Machinery and equipment		87.9			98.4
		108.4			122.8
Less: Accumulated depreciation		(89.7	)		(110.8	)
Total	$	18.7		$	12.0

Depreciation expense was $1.7 million and $4.1 million for the three months ended June 30, 2021 and 2020, respectively, and $3.1 million and $5.8 million for the six months ended June 30, 2021 and 2020, respectively.

Assets Held for Sale

Assets Held for Sale—As of June 30, 2021 and December 31, 2020, the Company had one real estate property, primarily consisting of land and an office building, held for sale with a carrying value of $5.5 million.

Software

Software—Capitalized software development costs are amortized over their estimated useful life using the straight-line method, up to a maximum of three years. Amortization expense related to internally-developed software, excluding amortization expense related to other intangible assets, was $8.1 million and $7.3 million for the three months ended June 30, 2021 and 2020, respectively, and $16.3 million and $14.6 million for the six months ended June 30, 2021 and 2020, respectively.

Investments

Investments—The carrying value of the Company’s investments in equity securities was $13.3 million and $13.4 million at June 30, 2021 and December 31, 2020, respectively. The Company measures its equity securities that do not have a readily determinable fair value at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company performs an assessment on a quarterly basis to determine whether triggering events for impairment exist and to identify any observable price changes. During the six months ended June 30, 2021, the Company recorded an unrealized loss of $0.2 million resulting from an observable price change of an investment due to an orderly transaction for the identical or a similar investment.

Current Expected Credit Loss Reserve

Current Expected Credit Loss Reserve—Transactions affecting the current expected credit loss (“CECL”) reserve during the six months ended June 30, 2021 and 2020 were as follows:

	June 30, 2021			June 30, 2020
Balance, beginning of year (a)	$	10.5		$	7.7
Adoption of ASU 2016-13 (b)		—			0.5
Provisions charged to expense and reclassifications		3.4			4.3
Write-offs and other		(0.5	)		(1.0	)
Balance, end of period (a)	$	13.4		$	11.5

(a)As of June 30, 2021, the CECL reserve balance is comprised of a $12.2 million provision for accounts receivable and a $1.2 million provision for unbilled receivables and contract assets. As of December 31, 2020, the CECL reserve balance was comprised of a $10.1 million provision for accounts receivable and a $0.4 million provision for unbilled receivables and contract assets.

(b)On January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, and recorded a $0.5 million cumulative-effect adjustment to retained earnings, as further disclosed in the Annual Report.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements 

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, to simplify the accounting for income taxes by removing certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. ASU 2019-12 also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted the standard prospectively on January 1, 2021. The adoption of this standard did not have a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements. 

Revenue Recognition

Revenue Recognition

The Company manages highly-customized data and materials to enable filings with the SEC on behalf of its customers as well as manages virtual data rooms and performs eXtensible Business Reporting Language (“XBRL”) and other services. Clients are provided with EDGAR filing services, XBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among other services. The Company’s software solutions include Venue, the Arc Suite software platform, ActiveDisclosure and data and analytics, among others. The Company also provides digital document creation, online content management and print and distribution solutions to public and private companies, mutual funds and other regulated investment firms to serve their regulatory and compliance needs.

Revenue is recognized upon transfer of control of promised services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The Company’s services include software solutions and tech-enabled services whereas the Company’s products are comprised of print and distribution offerings. The Company’s arrangements with customers often include promises to transfer multiple services or products to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately requires significant judgment. Certain customer arrangements have multiple performance obligations as certain promises are both capable of being distinct and are distinct within the context of the contract. Other customer arrangements have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts, and therefore are not distinct. Revenue for the Company’s tech-enabled services, software solutions and print and distribution offerings is recognized either over time or at a point in time, as further disclosed in the Annual Report.