Summary Of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 28, 2014

Accounting Policies [Abstract]

Schedule of Error Corrections and Prior Period Adjustments

The following tables compare our previously reported Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 29, 2013 and Consolidated Cash Flows for the nine months ended September 29, 2013 to the corresponding financial statements for the quarterly period as restated.

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Quarter Ended									Nine months ended
	September 29, 2013									September 29, 2013
(amounts in thousands, except per share data)	As Previously Reported			Restatement Adjustments			As Restated in this Quarterly Report on Form 10-Q			As Previously Reported			Restatement Adjustments			As Restated in this Quarterly Report on Form 10-Q
Net revenues	$	174,466		$	422		$	174,888		$	495,319		$	32		$	495,351
Cost of revenues	104,210			146			104,356			301,503			159			301,662
Gross profit	70,256			276			70,532			193,816			(127		)	193,689
Selling, general, and administrative expenses	50,980			412			51,392			163,117			1,015			164,132
Research and development	4,369			—			4,369			13,689			—			13,689
Restructuring expenses	937			—			937			4,582			—			4,582
Litigation settlement	—			—			—			(6,584		)	—			(6,584		)
Acquisition costs	253			—			253			694			—			694
Other operating income	—			—			—			(578		)	—			(578		)
Operating income (loss)	13,717			(136		)	13,581			18,896			(1,142		)	17,754
Interest income	294			—			294			1,098			—			1,098
Interest expense	2,453			523			2,976			7,334			1,536			8,870
Other loss, net	(1,002		)	—			(1,002		)	(3,513		)	—			(3,513		)
Earnings (loss) from continuing operations before income taxes	10,556			(659		)	9,897			9,147			(2,678		)	6,469
Income taxes expense (benefit)	2,832			(167		)	2,665			3,895			(630		)	3,265
Net earnings (loss) from continuing operations	7,724			(492		)	7,232			5,252			(2,048		)	3,204
Loss from discontinued operations, net of tax expense of $0 and $68	(100		)	—			(100		)	(16,985		)	—			(16,985		)
Net earnings (loss)	7,624			(492		)	7,132			(11,733		)	(2,048		)	(13,781		)
Less: income attributable to non-controlling interests	—			—			—			1			—			1
Net earnings (loss) attributable to Checkpoint Systems, Inc.	$	7,624		$	(492	)	$	7,132		$	(11,734	)	$	(2,048	)	$	(13,782	)
Basic earnings (loss) attributable to Checkpoint Systems, Inc. per share:
Earnings from continuing operations	$	0.18		$	(0.01	)	$	0.17		$	0.13		$	(0.05	)	$	0.08
Loss from discontinued operations, net of tax	$	—		$	—		$	—		$	(0.41	)	$	—		$	(0.41	)
Basic earnings (loss) attributable to Checkpoint Systems, Inc. per share	$	0.18		$	(0.01	)	$	0.17		$	(0.28	)	$	(0.05	)	$	(0.33	)
Diluted earnings (loss) attributable to Checkpoint Systems, Inc. per share:
Earnings from continuing operations	$	0.18		$	(0.01	)	$	0.17		$	0.13		$	(0.05	)	$	0.08
Loss from discontinued operations, net of tax	$	—		$	—		$	—		$	(0.41	)	$	—		$	(0.41	)
Diluted earnings (loss) attributable to Checkpoint Systems, Inc. per share	$	0.18		$	(0.01	)	$	0.17		$	(0.28	)	$	(0.05	)	$	(0.33	)

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	Quarter Ended							Nine months ended
	September 29, 2013							September 29, 2013
(amounts in thousands)	As Previously Reported		Restatement Adjustments			As Restated in this Quarterly Report on Form 10-Q		As Previously Reported			Restatement Adjustments			As Restated in this Quarterly Report on Form 10-Q
Net earnings (loss)	$	7,624	$	(492	)	$	7,132	$	(11,733	)	$	(2,048	)	$	(13,781	)
Other comprehensive income (loss), net of tax:
Amortization of pension plan actuarial losses, net of tax benefit of $122 and $343	269		—			269		824			—			824
Change in realized and unrealized gains (losses) on derivative hedges, net of tax expense of $139 and $139	132		—			132		(21		)	—			(21		)
Foreign currency translation adjustment	4,292		(990		)	3,302		313			(606		)	(293		)
Total other comprehensive income (loss), net of tax	4,693		(990		)	3,703		1,116			(606		)	510
Comprehensive income (loss)	12,317		(1,482		)	10,835		(10,617		)	(2,654		)	(13,271		)
Less: comprehensive loss attributable to non-controlling interests	—		—			—		(172		)	—			(172		)
Comprehensive income (loss) attributable to Checkpoint Systems, Inc.	$	12,317	$	(1,482	)	$	10,835	$	(10,445	)	$	(2,654	)	$	(13,099	)

CHECKPOINT SYSTEMS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Nine months ended
	September 29, 2013
(amounts in thousands)	As Previously Reported			Restatement Adjustments			As Restated in this Quarterly Report on Form 10-Q
Cash flows from operating activities:
Net loss	$	(11,733	)	$	(2,048	)	$	(13,781	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	21,315			—			20,094
Amortization of debt issuance costs	—			—			1,221
Interest on financing liability	—			1,536			1,536
Deferred taxes	(228		)	(630		)	(858		)
Stock-based compensation	5,145			—			5,145
Provision for losses on accounts receivable	(638		)	—			(638		)
Excess tax benefit on stock compensation	(594		)	—			(594		)
Loss on disposal of fixed assets	343			—			343
Litigation settlement	(6,584		)	—			(6,584		)
Gain on sale of subsidiary	(248		)	—			(248		)
Loss on sale of discontinued operations	13,043			—			13,043
Restructuring-related asset impairment	731			—			731
Decrease (increase) in operating assets, net of the effects of acquired companies:
Accounts receivable	25,020			(4,318		)	20,702
Inventories	(12,514		)	73			(12,441		)
Other current assets	(3,824		)	(3,088		)	(6,912		)
(Decrease) increase in operating liabilities, net of the effects of acquired companies:
Accounts payable	(2,604		)	4,930			2,326
Income taxes	(1,950		)	—			(1,950		)
Unearned revenues - current	(8,139		)	3,715			(4,424		)
Restructuring reserve	(5,923		)	—			(5,923		)
Other liabilities	(14,825		)	(170		)	(14,995		)
Net cash used in operating activities	(4,207		)	—			(4,207		)
Cash flows from investing activities:
Acquisition of property, plant, and equipment and intangibles	(5,955		)	—			(5,955		)
Cash proceeds from the sale of discontinued operations	1,502			—			1,502
Cash proceeds from the sale of subsidiary	227			—			227
Other investing activities	1,151			—			1,151
Net cash used in investing activities	(3,075		)	—			(3,075		)
Cash flows from financing activities:
Proceeds from stock issuances	2,980			—			2,980
Excess tax benefit on stock compensation	594			—			594
Proceeds from short-term debt	2,759			—			2,759
Payment of short-term debt	(2,561		)	—			(2,561		)
Net change in factoring and bank overdrafts	(441		)	—			(441		)
Payment of long-term debt	(17,138		)	—			(17,138		)
Net cash used in financing activities	(13,807		)	—			(13,807		)
Effect of foreign currency rate fluctuations on cash and cash equivalents	(1,544		)	—			(1,544		)
Net decrease in cash and cash equivalents	(22,633		)	—			(22,633		)
Cash and cash equivalents:
Beginning of period	118,829			—			118,829
End of period	$	96,196		$	—		$	96,196

The aggregate impacts of correcting the errors relating to the Spain transaction as of and for the three and nine months ended September 29, 2013 were as follows:

	Restatement Adjustments to Previously Reported Income Statement - Income/(Expense)
	Quarter (13 weeks) ended			Nine months (39 weeks) ended
(amounts in millions)	September 29, 2013			September 29, 2013
Net revenues	$	—		$	(0.9	)
Operating income	—			(0.9		)
Interest expense	0.5			(1.5		)
Income taxes expense	(0.2		)	(0.7		)
Net loss	(0.3		)	(1.7		)

Schedule Of Movement Of Warranty Reserves

The following table sets forth the movement in the warranty reserve which is located in the Other Accrued Expenses section of our Consolidated Balance Sheets:

(amounts in thousands)
Nine months ended	September 28, 2014			September 29, 2013
Balance at beginning of year	$	4,521		3,995
Accruals for warranties issued, net	3,054			3,353
Settlements made	(2,717		)	(2,980		)
Foreign currency translation adjustment	(184		)	(4		)
Balance at end of period	$	4,674		$	4,364

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of Accumulated Other Comprehensive Income (Loss), net of tax, for the nine months ended September 28, 2014 were as follows:

(amounts in thousands)	Pension plan			Changes in realized and unrealized gains (losses) on derivative hedges		Foreign currency translation adjustment			Total accumulated other comprehensive income
Balance, December 29, 2013	$	(17,773	)	$	—	$	20,018		$	2,245
Other comprehensive income before reclassifications	1,346			—		(11,618		)	(10,272		)
Amounts reclassified from other comprehensive income	1,148			—		—			1,148
Net other comprehensive income	2,494			—		(11,618		)	(9,124		)
Balance, September 28, 2014	$	(15,279	)	$	—	$	8,400		$	(6,879	)

Reclassification Out Of Accumulated Other Comprehensive Income (Loss)

The significant items reclassified from each component of other comprehensive income (loss) for the three months ended September 28, 2014 and September 29, 2013 were as follows:

(amounts in thousands)	September 28, 2014				September 29, 2013
Details about accumulated other comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)			Affected line item in the statement where net loss is presented	Amount reclassified from accumulated other comprehensive income (loss)			Affected line item in the statement where net loss is presented
Amortization of pension plan items
Actuarial loss (1)	$	(373	)		$	(390	)
Prior service cost (1)	(3		)		(1		)
	(376		)	Total before tax	(391		)	Total before tax
	(217		)	Tax benefit	122			Tax benefit
	$	(593	)	Net of tax	$	(269	)	Net of tax
Gains on cash flow hedges
Foreign currency revenue forecast contracts	$	—		Cost of revenues	$	7		Cost of revenues
	—			Total before tax	7			Total before tax
	—			Tax expense	(139		)	Tax expense
	$	—		Net of tax	$	(132	)	Net of tax
Non-controlling interest
Sale of 51% interest in Sri Lanka subsidiary	$	—		Other operating income	$	—		Other operating income
	—			Total before tax	—			Total before tax
	—			Tax expense	—			Tax expense
	$	—		Net of tax	$	—		Net of tax
Total reclassifications for the period	$	(593	)		$	(401	)

⁽¹⁾  These accumulated other comprehensive income components are included in the computation of net periodic pension costs. Refer to Note 9 of the Consolidated Financial Statements.

The significant items reclassified from each component of other comprehensive income (loss) for the nine months ended September 28, 2014 and September 29, 2013 were as follows:

(amounts in thousands)	September 28, 2014				September 29, 2013
Details about accumulated other comprehensive income (loss) components	Amount reclassified from accumulated other comprehensive income (loss)			Affected line item in the statement where net loss is presented	Amount reclassified from accumulated other comprehensive income (loss)			Affected line item in the statement where net loss is presented
Amortization of pension plan items
Actuarial loss (1)	$	(1,144	)		$	(1,165	)
Prior service cost (1)	(9		)		(2		)
	(1,153		)	Total before tax	(1,167		)	Total before tax
	5			Tax benefit	343			Tax benefit
	$	(1,148	)	Net of tax	$	(824	)	Net of tax
Gains on cash flow hedges
Foreign currency revenue forecast contracts	$	—		Cost of revenues	$	160		Cost of revenues
	—			Total before tax	160			Total before tax
	—			Tax expense	(139		)	Tax expense
	$	—		Net of tax	$	21		Net of tax
Non-controlling interest
Sale of 51% interest in Sri Lanka subsidiary	$	—		Other operating income	$	(172	)	Other operating income
	—			Total before tax	(172		)	Total before tax
	—			Tax expense	—			Tax expense
	$	—		Net of tax	$	(172	)	Net of tax
Total reclassifications for the period	$	(1,148	)		$	(975	)

⁽¹⁾  These accumulated other comprehensive income components are included in the computation of net periodic pension costs. Refer to Note 9 of the Consolidated Financial Statements.