We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type |
---|---|---|---|
Blackhawk Network Holdings, Inc. (delisted) | NASDAQ:HAWK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 45.15 | 45.10 | 45.30 | 0 | 01:00:00 |
|
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
43-2099257
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
||
|
|
|
6220 Stoneridge Mall Road
Pleasanton, CA
|
|
94588
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
Emerging growth company
|
|
¨
|
|
|
|
|
|
|
|
Page
|
PART I. FINANCIAL STATEMENTS
|
|
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II. OTHER INFORMATION
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
September 9, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
304,904
|
|
|
$
|
1,008,125
|
|
|
$
|
300,349
|
|
Restricted cash
|
66,509
|
|
|
10,793
|
|
|
2,500
|
|
|||
Settlement receivables, net
|
429,494
|
|
|
641,691
|
|
|
275,471
|
|
|||
Accounts receivable, net
|
226,126
|
|
|
262,672
|
|
|
199,552
|
|
|||
Other current assets
|
191,691
|
|
|
131,375
|
|
|
123,919
|
|
|||
Total current assets
|
1,218,724
|
|
|
2,054,656
|
|
|
901,791
|
|
|||
Property, equipment and technology, net
|
180,554
|
|
|
172,381
|
|
|
168,865
|
|
|||
Intangible assets, net
|
418,046
|
|
|
350,185
|
|
|
293,034
|
|
|||
Goodwill
|
656,266
|
|
|
570,398
|
|
|
508,607
|
|
|||
Deferred income taxes
|
351,760
|
|
|
362,302
|
|
|
352,683
|
|
|||
Other assets
|
86,610
|
|
|
85,856
|
|
|
69,039
|
|
|||
TOTAL ASSETS
|
$
|
2,911,960
|
|
|
$
|
3,595,778
|
|
|
$
|
2,294,019
|
|
|
|
|
|
|
|
||||||
See accompanying notes to condensed consolidated financial statements
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except par value)
(Unaudited)
|
|||||||||||
|
September 9, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Settlement payables
|
$
|
646,160
|
|
|
$
|
1,626,827
|
|
|
$
|
522,133
|
|
Consumer and customer deposits
|
267,642
|
|
|
173,344
|
|
|
115,085
|
|
|||
Accounts payable and accrued operating expenses
|
142,029
|
|
|
153,885
|
|
|
103,920
|
|
|||
Deferred revenue
|
151,425
|
|
|
150,582
|
|
|
113,867
|
|
|||
Note payable, current portion
|
9,890
|
|
|
9,856
|
|
|
9,846
|
|
|||
Notes payable to Safeway
|
4,201
|
|
|
3,163
|
|
|
3,239
|
|
|||
Bank line of credit
|
115,000
|
|
|
—
|
|
|
—
|
|
|||
Other current liabilities
|
74,804
|
|
|
51,176
|
|
|
48,630
|
|
|||
Total current liabilities
|
1,411,151
|
|
|
2,168,833
|
|
|
916,720
|
|
|||
Deferred income taxes
|
30,516
|
|
|
27,887
|
|
|
19,930
|
|
|||
Note payable
|
178,048
|
|
|
137,984
|
|
|
137,848
|
|
|||
Convertible notes payable
|
437,769
|
|
|
429,026
|
|
|
425,833
|
|
|||
Other liabilities
|
26,644
|
|
|
39,653
|
|
|
25,429
|
|
|||
Total liabilities
|
2,084,128
|
|
|
2,803,383
|
|
|
1,525,760
|
|
|||
Commitments and contingencies (see Note 9)
|
|
|
|
|
|
||||||
Stockholders’ equity:
|
|
|
|
|
|
||||||
Preferred stock: $0.001 par value; 10,000 shares authorized; no shares outstanding
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock: $0.001 par value; 210,000 shares authorized; 56,777, 55,667 and 55,368 shares outstanding, respectively
|
57
|
|
|
56
|
|
|
55
|
|
|||
Additional paid-in capital
|
638,008
|
|
|
608,568
|
|
|
594,739
|
|
|||
Accumulated other comprehensive loss
|
(14,934
|
)
|
|
(48,877
|
)
|
|
(34,398
|
)
|
|||
Retained earnings
|
200,484
|
|
|
228,451
|
|
|
203,791
|
|
|||
Total Blackhawk Network Holdings, Inc. equity
|
823,615
|
|
|
788,198
|
|
|
764,187
|
|
|||
Non-controlling interests
|
4,217
|
|
|
4,197
|
|
|
4,072
|
|
|||
Total stockholders’ equity
|
827,832
|
|
|
792,395
|
|
|
768,259
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
2,911,960
|
|
|
$
|
3,595,778
|
|
|
$
|
2,294,019
|
|
|
12 weeks ended
|
|
36 weeks ended
|
||||||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
September 9, 2017
|
|
September 10, 2016
|
||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
||||||||
Commissions and fees
|
$
|
269,737
|
|
|
$
|
248,138
|
|
|
$
|
807,576
|
|
|
$
|
750,693
|
|
Program and other fees
|
95,592
|
|
|
64,857
|
|
|
304,416
|
|
|
207,718
|
|
||||
Marketing
|
14,348
|
|
|
17,943
|
|
|
53,454
|
|
|
52,098
|
|
||||
Product sales
|
39,582
|
|
|
30,622
|
|
|
124,195
|
|
|
108,719
|
|
||||
Total operating revenues
|
419,259
|
|
|
361,560
|
|
|
1,289,641
|
|
|
1,119,228
|
|
||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Partner distribution expense
|
196,633
|
|
|
178,363
|
|
|
577,634
|
|
|
541,749
|
|
||||
Processing and services
|
93,877
|
|
|
75,818
|
|
|
303,829
|
|
|
226,634
|
|
||||
Sales and marketing
|
58,711
|
|
|
52,327
|
|
|
199,218
|
|
|
166,176
|
|
||||
Costs of products sold
|
37,148
|
|
|
29,122
|
|
|
117,882
|
|
|
103,163
|
|
||||
General and administrative
|
24,122
|
|
|
21,773
|
|
|
78,710
|
|
|
67,827
|
|
||||
Transition and acquisition
|
665
|
|
|
2,574
|
|
|
2,021
|
|
|
4,160
|
|
||||
Amortization of acquisition intangibles
|
13,904
|
|
|
10,376
|
|
|
40,577
|
|
|
35,533
|
|
||||
Change in fair value of contingent consideration
|
(2,100
|
)
|
|
1,300
|
|
|
(5,097
|
)
|
|
2,100
|
|
||||
Goodwill impairment
|
9,000
|
|
|
—
|
|
|
9,000
|
|
|
—
|
|
||||
Total operating expenses
|
431,960
|
|
|
371,653
|
|
|
1,323,774
|
|
|
1,147,342
|
|
||||
OPERATING INCOME (LOSS)
|
(12,701
|
)
|
|
(10,093
|
)
|
|
(34,133
|
)
|
|
(28,114
|
)
|
||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
||||||||
Interest income and other income (expense), net
|
631
|
|
|
2,360
|
|
|
2,134
|
|
|
3,258
|
|
||||
Interest expense
|
(7,374
|
)
|
|
(5,684
|
)
|
|
(21,368
|
)
|
|
(13,868
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
|
(19,444
|
)
|
|
(13,417
|
)
|
|
(53,367
|
)
|
|
(38,724
|
)
|
||||
INCOME TAX EXPENSE (BENEFIT)
|
(11,858
|
)
|
|
(8,357
|
)
|
|
(26,224
|
)
|
|
(18,884
|
)
|
||||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(7,586
|
)
|
|
(5,060
|
)
|
|
(27,143
|
)
|
|
(19,840
|
)
|
||||
Loss (income) attributable to non-controlling interests, net of tax
|
(180
|
)
|
|
(42
|
)
|
|
(460
|
)
|
|
(152
|
)
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(7,766
|
)
|
|
$
|
(5,102
|
)
|
|
$
|
(27,603
|
)
|
|
$
|
(19,992
|
)
|
EARNINGS (LOSS) PER SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.14
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.36
|
)
|
Diluted
|
$
|
(0.14
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.36
|
)
|
Weighted average shares outstanding—basic
|
56,709
|
|
|
55,668
|
|
|
56,355
|
|
|
55,851
|
|
||||
Weighted average shares outstanding—diluted
|
56,709
|
|
|
55,668
|
|
|
56,355
|
|
|
55,851
|
|
|
12 weeks ended
|
|
36 weeks ended
|
||||||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
September 9, 2017
|
|
September 10, 2016
|
||||||||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
$
|
(7,586
|
)
|
|
$
|
(5,060
|
)
|
|
$
|
(27,143
|
)
|
|
$
|
(19,840
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments
|
19,764
|
|
|
(2,504
|
)
|
|
33,503
|
|
|
5,547
|
|
||||
COMPREHENSIVE INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
12,178
|
|
|
(7,564
|
)
|
|
6,360
|
|
|
(14,293
|
)
|
||||
Comprehensive loss (income) attributable to non-controlling interests, net of tax
|
15
|
|
|
129
|
|
|
(20
|
)
|
|
98
|
|
||||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
12,193
|
|
|
$
|
(7,435
|
)
|
|
$
|
6,340
|
|
|
$
|
(14,195
|
)
|
|
36 weeks ended
|
|
||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
||||
OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income (loss) before allocation to non-controlling interests
|
$
|
(27,143
|
)
|
|
$
|
(19,840
|
)
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization of property, equipment and technology
|
37,518
|
|
|
33,096
|
|
|
||
Goodwill impairment
|
9,000
|
|
|
—
|
|
|
||
Amortization of intangibles
|
44,416
|
|
|
38,988
|
|
|
||
Amortization of deferred program and contract costs
|
21,706
|
|
|
18,805
|
|
|
||
Amortization of deferred financing costs and debt discount
|
9,546
|
|
|
2,984
|
|
|
||
Loss on property, equipment and technology disposal/write-down
|
660
|
|
|
2,758
|
|
|
||
Employee stock-based compensation expense
|
24,560
|
|
|
24,865
|
|
|
||
Change in fair value of contingent consideration
|
(5,097
|
)
|
|
2,100
|
|
|
||
Other
|
(3,388
|
)
|
|
38
|
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Settlement receivables
|
233,441
|
|
|
359,398
|
|
|
||
Settlement payables
|
(1,003,220
|
)
|
|
(1,091,151
|
)
|
|
||
Accounts receivable, current and long-term
|
35,179
|
|
|
44,585
|
|
|
||
Other current assets
|
16,807
|
|
|
3,940
|
|
|
||
Other assets
|
(12,172
|
)
|
|
(9,299
|
)
|
|
||
Consumer and customer deposits
|
12,330
|
|
|
13,963
|
|
|
||
Accounts payable and accrued operating expenses
|
(17,426
|
)
|
|
(28,775
|
)
|
|
||
Deferred revenue
|
4,948
|
|
|
2,703
|
|
|
||
Other current and long-term liabilities
|
5,334
|
|
|
(24,912
|
)
|
|
||
Income taxes, net
|
(28,276
|
)
|
|
(13,883
|
)
|
|
||
Net cash (used in) provided by operating activities
|
(641,277
|
)
|
|
(639,637
|
)
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
|
||||
Expenditures for property, equipment and technology
|
(43,484
|
)
|
|
(33,522
|
)
|
|
||
Business acquisitions, net of cash acquired
|
(170,773
|
)
|
|
(144,284
|
)
|
|
||
Investment in unconsolidated entities
|
(5,801
|
)
|
|
(3,901
|
)
|
|
||
Change in restricted cash
|
2,500
|
|
|
689
|
|
|
||
Other
|
(3,245
|
)
|
|
4,000
|
|
|
||
Net cash (used in) provided by investing activities
|
(220,803
|
)
|
|
(177,018
|
)
|
|
||
|
|
|
|
|
||||
|
|
|
|
|
||||
See accompanying notes to condensed consolidated financial statements
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)
|
||||||||
|
36 weeks ended
|
|
||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
||||
FINANCING ACTIVITIES:
|
|
|
|
|
||||
Payments for acquisition liability
|
(5,503
|
)
|
|
—
|
|
|
||
Repayment of debt assumed in business acquisitions
|
(8,585
|
)
|
|
(8,964
|
)
|
|
||
Proceeds from issuance of note payable
|
50,000
|
|
|
250,000
|
|
|
||
Repayment of note payable
|
(10,000
|
)
|
|
(463,750
|
)
|
|
||
Payments of financing costs
|
(1,025
|
)
|
|
(15,926
|
)
|
|
||
Borrowings under revolving bank line of credit
|
1,771,381
|
|
|
1,959,749
|
|
|
||
Repayments on revolving bank line of credit
|
(1,656,381
|
)
|
|
(1,959,749
|
)
|
|
||
Proceeds from convertible debt
|
—
|
|
|
500,000
|
|
|
||
Payments for note hedges
|
—
|
|
|
(75,750
|
)
|
|
||
Proceeds from warrants
|
—
|
|
|
47,000
|
|
|
||
Repayment on notes payable to Safeway
|
(254
|
)
|
|
(890
|
)
|
|
||
Proceeds from issuance of common stock from exercise of employee stock options and employee stock purchase plans
|
13,286
|
|
|
4,491
|
|
|
||
Other stock-based compensation related
|
(10,157
|
)
|
|
(2,135
|
)
|
|
||
Repurchase of common stock
|
—
|
|
|
(34,845
|
)
|
|
||
Other
|
—
|
|
|
(155
|
)
|
|
||
Net cash (used in) provided by financing activities
|
142,762
|
|
|
199,076
|
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
16,097
|
|
|
3,352
|
|
|
||
Decrease in cash and cash equivalents
|
(703,221
|
)
|
|
(614,227
|
)
|
|
||
Cash and cash equivalents—beginning of period
|
1,008,125
|
|
|
914,576
|
|
|
||
Cash and cash equivalents—end of period
|
$
|
304,904
|
|
|
$
|
300,349
|
|
|
|
|
|
|
|
||||
NONCASH FINANCING AND INVESTING ACTIVITIES:
|
|
|
|
|
||||
Financing of business acquisition with contingent consideration
|
$
|
1,640
|
|
|
$
|
20,100
|
|
|
Cash and cash equivalents
|
$
|
14,469
|
|
Restricted cash
|
7,820
|
|
|
Settlement receivables, net
|
2,815
|
|
|
Identifiable technology and intangible assets
|
89,132
|
|
|
Goodwill
|
95,387
|
|
|
Other tangible assets, net
|
1,570
|
|
|
Settlement payables
|
(7,852
|
)
|
|
Consumer and customer deposits
|
(11,779
|
)
|
|
Accounts payable and accrued operating expenses
|
(7,025
|
)
|
|
Debt assumed
|
(8,285
|
)
|
|
Deferred income taxes
|
(10,256
|
)
|
|
Total purchase consideration
|
$
|
165,996
|
|
|
Fair Value
|
|
Useful Life
|
||
Customer relationships
|
$
|
87,132
|
|
|
5 years
|
Technology
|
2,000
|
|
|
1.5 years
|
|
Total identifiable technology and intangible assets
|
$
|
89,132
|
|
|
|
|
36 weeks ended
|
||||||
|
September 9, 2017
|
|
September 10, 2016
|
||||
|
(Unaudited)
|
||||||
Total revenues
|
$
|
1,317,226
|
|
|
$
|
1,139,796
|
|
Net loss attributable to Blackhawk Network Holdings, Inc.
|
$
|
(35,782
|
)
|
|
$
|
(30,846
|
)
|
Pro forma EPS—Basic
|
$
|
(0.63
|
)
|
|
$
|
(0.55
|
)
|
Pro forma EPS—Diluted
|
$
|
(0.63
|
)
|
|
$
|
(0.55
|
)
|
|
September 9, 2017
|
||
2018
|
$
|
10,000
|
|
2019
|
10,000
|
|
|
2020
|
20,000
|
|
|
2021
|
150,000
|
|
|
2022
|
500,000
|
|
|
Total long-term debt
|
$
|
690,000
|
|
|
September 9, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,792
|
|
|
$
|
14,792
|
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
300,015
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
300,015
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,752
|
|
|
$
|
23,752
|
|
|
September 10, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
5,112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,112
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22,200
|
|
|
$
|
22,200
|
|
|
36 weeks ended
|
||||||
|
September 9, 2017
|
|
September 10, 2016
|
||||
Balance, beginning of period
|
$
|
23,752
|
|
|
$
|
—
|
|
Additions from acquisitions (see
Note 2—Business Acquisitions
)
|
1,640
|
|
|
20,100
|
|
||
Change in fair value of contingent consideration
|
(5,097
|
)
|
|
2,100
|
|
||
Settlement
|
(5,503
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
14,792
|
|
|
$
|
22,200
|
|
|
September 9, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
Other current assets:
|
|
|
|
|
|
||||||
Inventory
|
$
|
40,124
|
|
|
$
|
43,950
|
|
|
$
|
35,634
|
|
Deferred expenses
|
19,194
|
|
|
22,148
|
|
|
12,099
|
|
|||
Income tax receivables
|
41,393
|
|
|
13,599
|
|
|
38,427
|
|
|||
Other
|
44,159
|
|
|
51,678
|
|
|
37,759
|
|
|||
Assets held for sale
|
46,821
|
|
|
—
|
|
|
—
|
|
|||
Total other current assets
|
$
|
191,691
|
|
|
$
|
131,375
|
|
|
$
|
123,919
|
|
Other assets:
|
|
|
|
|
|
||||||
Deferred program and contract costs
|
$
|
38,820
|
|
|
$
|
48,066
|
|
|
$
|
44,388
|
|
Other receivables
|
1,646
|
|
|
2,713
|
|
|
1,390
|
|
|||
Income tax receivables
|
2,270
|
|
|
2,358
|
|
|
—
|
|
|||
Deferred financing costs
|
2,999
|
|
|
2,688
|
|
|
2,871
|
|
|||
Other
|
40,875
|
|
|
30,031
|
|
|
20,390
|
|
|||
Total other assets
|
$
|
86,610
|
|
|
$
|
85,856
|
|
|
$
|
69,039
|
|
Other current liabilities:
|
|
|
|
|
|
||||||
Payroll and related liabilities
|
$
|
28,920
|
|
|
$
|
24,944
|
|
|
$
|
25,425
|
|
Income taxes payable
|
4,994
|
|
|
4,199
|
|
|
3,158
|
|
|||
Acquisition liability
|
5,983
|
|
|
6,672
|
|
|
11,250
|
|
|||
Other payables and accrued liabilities
|
10,509
|
|
|
15,361
|
|
|
8,797
|
|
|||
Liabilities held for sale
|
24,398
|
|
|
—
|
|
|
—
|
|
|||
Total other current liabilities
|
$
|
74,804
|
|
|
$
|
51,176
|
|
|
$
|
48,630
|
|
Other liabilities:
|
|
|
|
|
|
||||||
Contingent consideration
|
$
|
9,800
|
|
|
$
|
17,080
|
|
|
$
|
10,950
|
|
Income taxes payable
|
4,595
|
|
|
6,957
|
|
|
6,213
|
|
|||
Deferred income and other liabilities
|
12,249
|
|
|
15,616
|
|
|
8,266
|
|
|||
Total other liabilities
|
$
|
26,644
|
|
|
$
|
39,653
|
|
|
$
|
25,429
|
|
|
September 9, 2017
|
||
Other current assets
|
$
|
5,708
|
|
Property, equipment and technology, net
|
7,097
|
|
|
Goodwill
|
31,491
|
|
|
Intangible assets, net
|
431
|
|
|
Total assets
|
$
|
44,727
|
|
|
|
||
Accounts payable and accrued operating expenses
|
$
|
1,479
|
|
Other current liabilities
|
503
|
|
|
Deferred revenue
|
167
|
|
|
Total liabilities
|
$
|
2,149
|
|
|
September 9, 2017
|
||
Accounts receivable, net
|
$
|
9,737
|
|
Other current assets
|
3,002
|
|
|
Property, equipment and technology, net
|
490
|
|
|
Intangible assets, net
|
6,173
|
|
|
Goodwill
|
26,303
|
|
|
Deferred income taxes
|
1,116
|
|
|
Total assets held for sale
|
$
|
46,821
|
|
|
|
||
Settlement payables
|
$
|
7,061
|
|
Consumer and customer deposits
|
1,812
|
|
|
Accounts payable and accrued operating expenses
|
3,135
|
|
|
Deferred revenue
|
1,784
|
|
|
Other current liabilities
|
10,493
|
|
|
Deferred income taxes
|
113
|
|
|
Total liabilities held for sale
|
$
|
24,398
|
|
|
September 9, 2017
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Total
|
||||||||
Balance, beginning of period
|
$
|
99,685
|
|
|
$
|
366,508
|
|
|
$
|
104,205
|
|
|
$
|
570,398
|
|
Goodwill impairment
|
(9,000
|
)
|
|
—
|
|
|
—
|
|
|
(9,000
|
)
|
||||
Re-allocation of international Incentives goodwill
|
—
|
|
|
(7,152
|
)
|
|
7,152
|
|
|
—
|
|
||||
Re-allocation of e-commerce goodwill
|
(10,505
|
)
|
|
10,505
|
|
|
—
|
|
|
—
|
|
||||
Acquisitions (see
Note 2—Business Acquisitions
)
|
—
|
|
|
105,306
|
|
|
3,153
|
|
|
108,459
|
|
||||
Measurement period of adjustments for 2016 acquisitions
|
338
|
|
|
—
|
|
|
(1,384
|
)
|
|
(1,046
|
)
|
||||
Asset held for sale (see
Note 5—Consolidated Financial Statement Details
)
|
—
|
|
|
—
|
|
|
(26,303
|
)
|
|
(26,303
|
)
|
||||
Foreign currency translation adjustments
|
—
|
|
|
2,344
|
|
|
11,414
|
|
|
13,758
|
|
||||
Balance, end of period
|
$
|
80,518
|
|
|
$
|
477,511
|
|
|
$
|
98,237
|
|
|
$
|
656,266
|
|
|
12 weeks ended
|
|
36 weeks ended
|
||||||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
September 9, 2017
|
|
September 10, 2016
|
||||||||
Processing and services
|
$
|
1,681
|
|
|
$
|
1,401
|
|
|
$
|
5,181
|
|
|
$
|
4,365
|
|
Sales and marketing
|
2,705
|
|
|
2,759
|
|
|
8,401
|
|
|
8,600
|
|
||||
Cost of products sold
|
14
|
|
|
31
|
|
|
35
|
|
|
89
|
|
||||
General and administrative
|
3,709
|
|
|
4,102
|
|
|
10,943
|
|
|
11,811
|
|
||||
Total stock-based compensation expense
|
$
|
8,109
|
|
|
$
|
8,293
|
|
|
$
|
24,560
|
|
|
$
|
24,865
|
|
|
12 weeks ended
|
||||||||||||||
|
September 9, 2017
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Consolidated
|
||||||||
Total operating revenues
|
$
|
204,420
|
|
|
$
|
80,671
|
|
|
$
|
134,168
|
|
|
$
|
419,259
|
|
Partner distribution expense
|
115,565
|
|
|
5,521
|
|
|
75,547
|
|
|
196,633
|
|
||||
Operating revenues, net of Partner distribution expense
|
88,855
|
|
|
75,150
|
|
|
58,621
|
|
|
222,626
|
|
||||
Other operating expenses
|
100,527
|
|
|
76,382
|
|
|
58,418
|
|
|
235,327
|
|
||||
Segment profit (loss) / Operating income (loss)
|
$
|
(11,672
|
)
|
|
$
|
(1,232
|
)
|
|
$
|
203
|
|
|
$
|
(12,701
|
)
|
Other income (expense)
|
|
|
|
|
|
|
(6,743
|
)
|
|||||||
Income (loss) before income tax expense
|
|
|
|
|
|
|
$
|
(19,444
|
)
|
||||||
Noncash charges
|
$
|
22,324
|
|
|
$
|
12,953
|
|
|
$
|
8,377
|
|
|
|
|
|
12 weeks ended
|
||||||||||||||
|
September 10, 2016
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Consolidated
|
||||||||
Total operating revenues
|
$
|
195,878
|
|
|
$
|
63,803
|
|
|
$
|
101,879
|
|
|
$
|
361,560
|
|
Partner distribution expense
|
103,473
|
|
|
4,996
|
|
|
69,894
|
|
|
178,363
|
|
||||
Operating revenues, net of Partner distribution expense
|
92,405
|
|
|
58,807
|
|
|
31,985
|
|
|
183,197
|
|
||||
Other operating expenses
|
89,768
|
|
|
65,981
|
|
|
37,541
|
|
|
193,290
|
|
||||
Segment profit (loss) / Operating income (loss)
|
$
|
2,637
|
|
|
$
|
(7,174
|
)
|
|
$
|
(5,556
|
)
|
|
$
|
(10,093
|
)
|
Other income (expense)
|
|
|
|
|
|
|
(3,324
|
)
|
|||||||
Income (loss) before income tax expense
|
|
|
|
|
|
|
$
|
(13,417
|
)
|
||||||
Noncash charges
|
$
|
10,070
|
|
|
$
|
22,148
|
|
|
$
|
4,402
|
|
|
|
|
36 weeks ended
|
||||||||||||||
|
September 9, 2017
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Consolidated
|
||||||||
Total operating revenues
|
$
|
649,763
|
|
|
$
|
224,598
|
|
|
$
|
415,280
|
|
|
$
|
1,289,641
|
|
Partner distribution expense
|
342,041
|
|
|
16,257
|
|
|
219,336
|
|
|
577,634
|
|
||||
Operating revenues, net of Partner distribution expense
|
307,722
|
|
|
208,341
|
|
|
195,944
|
|
|
712,007
|
|
||||
Other operating expenses
|
321,138
|
|
|
219,130
|
|
|
205,872
|
|
|
746,140
|
|
||||
Segment profit (loss) / Operating income (loss)
|
$
|
(13,416
|
)
|
|
$
|
(10,789
|
)
|
|
$
|
(9,928
|
)
|
|
$
|
(34,133
|
)
|
Other income (expense)
|
|
|
|
|
|
|
(19,234
|
)
|
|||||||
Income (loss) before income tax expense
|
|
|
|
|
|
|
$
|
(53,367
|
)
|
||||||
Noncash charges
|
$
|
49,600
|
|
|
$
|
40,652
|
|
|
$
|
24,902
|
|
|
|
|
36 weeks ended
|
||||||||||||||
|
September 10, 2016
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Consolidated
|
||||||||
Total operating revenues
|
$
|
648,982
|
|
|
$
|
184,576
|
|
|
$
|
285,670
|
|
|
$
|
1,119,228
|
|
Partner distribution expense
|
329,827
|
|
|
13,045
|
|
|
198,877
|
|
|
541,749
|
|
||||
Operating revenues, net of Partner distribution expense
|
319,155
|
|
|
171,531
|
|
|
86,793
|
|
|
577,479
|
|
||||
Other operating expenses
|
304,212
|
|
|
196,122
|
|
|
105,259
|
|
|
605,593
|
|
||||
Segment profit (loss) / Operating income (loss)
|
$
|
14,943
|
|
|
$
|
(24,591
|
)
|
|
$
|
(18,466
|
)
|
|
$
|
(28,114
|
)
|
Other income (expense)
|
|
|
|
|
|
|
(10,610
|
)
|
|||||||
Income (loss) before income tax expense
|
|
|
|
|
|
|
$
|
(38,724
|
)
|
||||||
Noncash charges
|
$
|
35,313
|
|
|
$
|
60,449
|
|
|
$
|
14,267
|
|
|
|
|
12 weeks ended
|
||||||||||||||
|
September 9, 2017
|
|
September 10, 2016
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income (loss) attributable to Blackhawk Network Holdings, Inc.
|
$
|
(7,766
|
)
|
|
$
|
(7,766
|
)
|
|
$
|
(5,102
|
)
|
|
$
|
(5,102
|
)
|
Distributed and undistributed earnings allocated to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to common stockholders
|
$
|
(7,766
|
)
|
|
$
|
(7,766
|
)
|
|
$
|
(5,102
|
)
|
|
$
|
(5,102
|
)
|
Weighted-average common shares outstanding
|
56,709
|
|
|
56,709
|
|
|
55,668
|
|
|
55,668
|
|
||||
Common share equivalents
|
|
|
—
|
|
|
|
|
|
—
|
|
|||||
Weighted-average shares outstanding
|
|
|
56,709
|
|
|
|
|
55,668
|
|
||||||
Earnings (loss) per share
|
$
|
(0.14
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
|
36 weeks ended
|
||||||||||||||
|
September 9, 2017
|
|
September 10, 2016
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income (loss) attributable to Blackhawk Network Holdings, Inc.
|
$
|
(27,603
|
)
|
|
$
|
(27,603
|
)
|
|
$
|
(19,992
|
)
|
|
$
|
(19,992
|
)
|
Distributed and undistributed earnings allocated to participating securities
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||
Net income (loss) attributable to common stockholders
|
$
|
(27,603
|
)
|
|
$
|
(27,603
|
)
|
|
$
|
(20,007
|
)
|
|
$
|
(20,007
|
)
|
Weighted-average common shares outstanding
|
56,355
|
|
|
56,355
|
|
|
55,851
|
|
|
55,851
|
|
||||
Common share equivalents
|
|
|
—
|
|
|
|
|
—
|
|
||||||
Weighted-average shares outstanding
|
|
|
56,355
|
|
|
|
|
55,851
|
|
||||||
Earnings (loss) per share
|
$
|
(0.49
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.36
|
)
|
|
$
|
(0.36
|
)
|
|
12 weeks ended
|
|
36 weeks ended
|
||||||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
September 9, 2017
|
|
September 10, 2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands, except percentages and per share amounts)
|
||||||||||||||
Prepaid and processing revenues
|
$
|
365,329
|
|
|
$
|
312,995
|
|
|
$
|
1,111,992
|
|
|
$
|
958,411
|
|
Partner distribution expense as a % of prepaid and processing revenues
|
53.8
|
%
|
|
57.0
|
%
|
|
51.9
|
%
|
|
56.5
|
%
|
||||
Prepaid and processing revenues:
|
|
|
|
|
|
|
|
||||||||
Commissions and fees
|
$
|
269,737
|
|
|
$
|
248,138
|
|
|
$
|
807,576
|
|
|
$
|
750,693
|
|
Program and other fees
|
95,592
|
|
|
64,857
|
|
|
304,416
|
|
|
207,718
|
|
||||
Prepaid and processing revenues
|
$
|
365,329
|
|
|
$
|
312,995
|
|
|
$
|
1,111,992
|
|
|
$
|
958,411
|
|
Total operating revenues
|
$
|
419,259
|
|
|
$
|
361,560
|
|
|
$
|
1,289,641
|
|
|
$
|
1,119,228
|
|
Revenue adjustment from purchase accounting (2)
|
965
|
|
|
3,666
|
|
|
4,454
|
|
|
11,875
|
|
||||
Marketing revenue and other pass-through revenue
|
(15,336
|
)
|
|
(17,943
|
)
|
|
(59,969
|
)
|
|
(52,098
|
)
|
||||
Partner distribution expense
|
(196,633
|
)
|
|
(178,363
|
)
|
|
(577,634
|
)
|
|
(541,749
|
)
|
||||
Adjusted operating revenues (1)
|
$
|
208,255
|
|
|
$
|
168,920
|
|
|
$
|
656,492
|
|
|
$
|
537,256
|
|
(1)
|
Our Adjusted operating revenues is a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. This measure, however, should be considered in addition to, and not as a substitute for or superior to, operating revenues, operating income, operating margin, cash flows, or other measures of the financial performance prepared in accordance with GAAP.
|
(2)
|
Impact on revenues recognized resulting from the step down in basis of deferred revenue from its carrying value to fair value in a business combination at the acquisition date.
|
•
|
adjusting our operating revenues for distribution commissions paid and other compensation to our retail distribution partners and business clients is useful to understanding our operating margin;
|
•
|
adjusting our operating revenues for marketing and other pass-through revenue, which has offsetting expense, is useful for understanding our operating margin;
|
•
|
in a business combination, a company records an adjustment to reduce the carrying value of deferred revenue to its fair value and reduces the company’s revenues from what it would have recorded otherwise, and as such we do not believe is indicative of our core operating performance.
|
|
12 weeks ended September 9, 2017
|
|
% of Total Operating Revenues
|
|
12 weeks ended September 10, 2016
|
|
% of Total Operating Revenues
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
269,737
|
|
|
64.3
|
%
|
|
$
|
248,138
|
|
|
68.6
|
%
|
Program and other fees
|
95,592
|
|
|
22.8
|
%
|
|
64,857
|
|
|
17.9
|
%
|
||
Marketing
|
14,348
|
|
|
3.4
|
%
|
|
17,943
|
|
|
5.0
|
%
|
||
Product sales
|
39,582
|
|
|
9.5
|
%
|
|
30,622
|
|
|
8.5
|
%
|
||
Total operating revenues
|
419,259
|
|
|
100.0
|
%
|
|
361,560
|
|
|
100.0
|
%
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||
Partner distribution expense
|
196,633
|
|
|
46.9
|
%
|
|
178,363
|
|
|
49.2
|
%
|
||
Processing and services
|
93,877
|
|
|
22.3
|
%
|
|
75,818
|
|
|
21.0
|
%
|
||
Sales and marketing
|
58,711
|
|
|
14.0
|
%
|
|
52,327
|
|
|
14.5
|
%
|
||
Costs of products sold
|
37,148
|
|
|
8.9
|
%
|
|
29,122
|
|
|
8.1
|
%
|
||
General and administrative
|
24,122
|
|
|
5.8
|
%
|
|
21,773
|
|
|
6.0
|
%
|
||
Transition and acquisition
|
665
|
|
|
0.2
|
%
|
|
2,574
|
|
|
0.7
|
%
|
||
Amortization of acquisition intangibles
|
13,904
|
|
|
3.3
|
%
|
|
10,376
|
|
|
2.9
|
%
|
||
Change in fair value of contingent consideration
|
(2,100
|
)
|
|
(0.5
|
)%
|
|
1,300
|
|
|
0.4
|
%
|
||
Goodwill impairment
|
9,000
|
|
|
2.1
|
%
|
|
—
|
|
|
—
|
%
|
||
Total operating expenses
|
431,960
|
|
|
103.0
|
%
|
|
371,653
|
|
|
102.8
|
%
|
||
OPERATING INCOME (LOSS)
|
(12,701
|
)
|
|
(3.0
|
)%
|
|
(10,093
|
)
|
|
(2.8
|
)%
|
||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
||||||
Interest income and other income (expense), net
|
631
|
|
|
0.2
|
%
|
|
2,360
|
|
|
0.7
|
%
|
||
Interest expense
|
(7,374
|
)
|
|
(1.8
|
)%
|
|
(5,684
|
)
|
|
(1.6
|
)%
|
||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
|
(19,444
|
)
|
|
(4.6
|
)%
|
|
(13,417
|
)
|
|
(3.7
|
)%
|
||
INCOME TAX EXPENSE (BENEFIT)
|
(11,858
|
)
|
|
(2.8
|
)%
|
|
(8,357
|
)
|
|
(2.3
|
)%
|
||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(7,586
|
)
|
|
(1.8
|
)%
|
|
(5,060
|
)
|
|
(1.4
|
)%
|
||
Loss (income) attributable to non-controlling interests, net of tax
|
(180
|
)
|
|
(0.1
|
)%
|
|
(42
|
)
|
|
—
|
%
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(7,766
|
)
|
|
(1.9
|
)%
|
|
$
|
(5,102
|
)
|
|
(1.4
|
)%
|
|
36 weeks ended September 9, 2017
|
|
% of Total Operating Revenues
|
|
36 weeks ended September 10, 2016
|
|
% of Total Operating Revenues
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
807,576
|
|
|
62.6
|
%
|
|
$
|
750,693
|
|
|
67.1
|
%
|
Program and other fees
|
304,416
|
|
|
23.6
|
%
|
|
207,718
|
|
|
18.6
|
%
|
||
Marketing
|
53,454
|
|
|
4.2
|
%
|
|
52,098
|
|
|
4.6
|
%
|
||
Product sales
|
124,195
|
|
|
9.6
|
%
|
|
108,719
|
|
|
9.7
|
%
|
||
Total operating revenues
|
1,289,641
|
|
|
100.0
|
%
|
|
1,119,228
|
|
|
100.0
|
%
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||
Partner distribution expense
|
577,634
|
|
|
44.8
|
%
|
|
541,749
|
|
|
48.4
|
%
|
||
Processing and services
|
303,829
|
|
|
23.6
|
%
|
|
226,634
|
|
|
20.2
|
%
|
||
Sales and marketing
|
199,218
|
|
|
15.4
|
%
|
|
166,176
|
|
|
14.8
|
%
|
||
Costs of products sold
|
117,882
|
|
|
9.1
|
%
|
|
103,163
|
|
|
9.2
|
%
|
||
General and administrative
|
78,710
|
|
|
6.1
|
%
|
|
67,827
|
|
|
6.1
|
%
|
||
Transition and acquisition
|
2,021
|
|
|
0.2
|
%
|
|
4,160
|
|
|
0.4
|
%
|
||
Amortization of acquisition intangibles
|
40,577
|
|
|
3.1
|
%
|
|
35,533
|
|
|
3.2
|
%
|
||
Change in fair value of contingent consideration
|
(5,097
|
)
|
|
(0.4
|
)%
|
|
2,100
|
|
|
0.2
|
%
|
||
Goodwill impairment
|
9,000
|
|
|
0.7
|
%
|
|
—
|
|
|
—
|
|
||
Total operating expenses
|
1,323,774
|
|
|
102.6
|
%
|
|
1,147,342
|
|
|
102.5
|
%
|
||
OPERATING INCOME (LOSS)
|
(34,133
|
)
|
|
(2.6
|
)%
|
|
(28,114
|
)
|
|
(2.5
|
)%
|
||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
||||||
Interest income and other income (expense), net
|
2,134
|
|
|
0.2
|
%
|
|
3,258
|
|
|
0.3
|
%
|
||
Interest expense
|
(21,368
|
)
|
|
(1.7
|
)%
|
|
(13,868
|
)
|
|
(1.3
|
)%
|
||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE
|
(53,367
|
)
|
|
(4.1
|
)%
|
|
(38,724
|
)
|
|
(3.5
|
)%
|
||
INCOME TAX EXPENSE (BENEFIT)
|
(26,224
|
)
|
|
(2.0
|
)%
|
|
(18,884
|
)
|
|
(1.7
|
)%
|
||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(27,143
|
)
|
|
(2.1
|
)%
|
|
(19,840
|
)
|
|
(1.8
|
)%
|
||
Loss (income) attributable to non-controlling interests, net of tax
|
(460
|
)
|
|
—
|
%
|
|
(152
|
)
|
|
—
|
%
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(27,603
|
)
|
|
(2.1
|
)%
|
|
$
|
(19,992
|
)
|
|
(1.8
|
)%
|
•
|
U.S. Retail - sale of prepaid cards to consumers in the U.S. through our physical retail distribution partners as well as through our various online distribution channels.
|
•
|
Incentives & Rewards - our incentives businesses in the U.S., which provide software, services and prepaid products to business clients for their loyalty, incentive and reward programs, our e-commerce incentives business, as well as our Achievers business in Canada.
|
•
|
International - our retail and incentives businesses outside of the United States, except for our Achievers business in Canada, which is reported in the Incentives & Rewards segment.
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
|||||||
Commissions and fees
|
$
|
269,737
|
|
|
$
|
248,138
|
|
|
$
|
21,599
|
|
|
8.7
|
%
|
Program and other fees
|
95,592
|
|
|
64,857
|
|
|
30,735
|
|
|
47.4
|
%
|
|||
Marketing
|
14,348
|
|
|
17,943
|
|
|
(3,595
|
)
|
|
(20.0
|
)%
|
|||
Product sales
|
39,582
|
|
|
30,622
|
|
|
8,960
|
|
|
29.3
|
%
|
|||
Total operating revenues
|
$
|
419,259
|
|
|
$
|
361,560
|
|
|
$
|
57,699
|
|
|
16.0
|
%
|
Partner distribution expense
|
196,633
|
|
|
178,363
|
|
|
18,270
|
|
|
10.2
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
222,626
|
|
|
$
|
183,197
|
|
|
$
|
39,429
|
|
|
21.5
|
%
|
|
36 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
|||||||
Commissions and fees
|
$
|
807,576
|
|
|
$
|
750,693
|
|
|
$
|
56,883
|
|
|
7.6
|
%
|
Program and other fees
|
304,416
|
|
|
207,718
|
|
|
96,698
|
|
|
46.6
|
%
|
|||
Marketing
|
53,454
|
|
|
52,098
|
|
|
1,356
|
|
|
2.6
|
%
|
|||
Product sales
|
124,195
|
|
|
108,719
|
|
|
15,476
|
|
|
14.2
|
%
|
|||
Total operating revenues
|
$
|
1,289,641
|
|
|
$
|
1,119,228
|
|
|
$
|
170,413
|
|
|
15.2
|
%
|
Partner distribution expense
|
577,634
|
|
|
541,749
|
|
|
35,885
|
|
|
6.6
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
712,007
|
|
|
$
|
577,479
|
|
|
$
|
134,528
|
|
|
23.3
|
%
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
204,420
|
|
|
$
|
195,878
|
|
|
$
|
8,542
|
|
|
4.4
|
%
|
Partner distribution expense
|
115,565
|
|
|
103,473
|
|
|
12,092
|
|
|
11.7
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
88,855
|
|
|
$
|
92,405
|
|
|
$
|
(3,550
|
)
|
|
(3.8
|
)%
|
Transaction dollar volume (1)
|
$
|
2,052,745
|
|
|
$
|
1,816,665
|
|
|
$
|
236,080
|
|
|
13.0
|
%
|
Prepaid and processing revenues
|
$
|
186,187
|
|
|
$
|
168,242
|
|
|
$
|
17,945
|
|
|
10.7
|
%
|
Prepaid and processing revenues as a percentage of transaction dollar volume (2)
|
9.1
|
%
|
|
9.3
|
%
|
|
(0.2
|
)%
|
|
(2.2
|
)%
|
|||
Partner distribution expense as a percentage of prepaid and processing revenues
|
62.1
|
%
|
|
61.5
|
%
|
|
0.6
|
%
|
|
1.0
|
%
|
|
36 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
649,763
|
|
|
$
|
648,982
|
|
|
$
|
781
|
|
|
0.1
|
%
|
Partner distribution expense
|
342,041
|
|
|
329,827
|
|
|
12,214
|
|
|
3.7
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
307,722
|
|
|
$
|
319,155
|
|
|
$
|
(11,433
|
)
|
|
(3.6
|
)%
|
Transaction dollar volume (1)
|
$
|
6,114,300
|
|
|
$
|
5,822,170
|
|
|
$
|
292,130
|
|
|
5.0
|
%
|
Prepaid and processing revenues
|
$
|
569,588
|
|
|
$
|
543,437
|
|
|
$
|
26,151
|
|
|
4.8
|
%
|
Prepaid and processing revenues as a percentage of transaction dollar volume (2)
|
9.3
|
%
|
|
9.3
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Partner distribution expense as a percentage of prepaid and processing revenues
|
60.1
|
%
|
|
60.7
|
%
|
|
(0.6
|
)%
|
|
(1.0
|
)%
|
(1)
|
Transaction dollar volume
represents the total dollar amount of value loaded onto any of our prepaid products. The dollar amount and volume of card sales and rebates processed directly affect the amount of our revenues and direct costs. We measure and monitor
Transaction dollar volume
by retail distribution partner channel and content provider program.
|
(2)
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—
Represents the total amount of
Commissions and fees
and
Program and other fees
recognized during the period as a percentage of
Transaction dollar volume
for the same period. Our prepaid product revenues vary among our various product offerings: closed loop gift and prepaid telecom cards generate the highest rates due to the content provider commissions; open loop gift cards also generate high rates due to program management fees, interchange and other fees included in
Program and other fees
in addition to the consumer purchase fees included in
Commissions and fees
; financial services products generate the lowest rates due to
higher average transaction values
. This metric helps us understand and manage overall margins from our product offerings.
|
•
|
Transaction dollar volume
—On October 1, 2015, the payment industry shifted liability for certain debit and credit card transactions to retailers who do not accept EMV chip technology transactions. During 2016, our non-EMV compliant distribution partners placed restrictions on the sale of open loop gift cards and some closed loop gift cards until they completed their EMV implementation. By the end of 2016, most of our distribution partner locations were EMV compliant and had lifted those restrictions. In 2017, the negative impact of restricted sales has gradually decreased which is reflected in higher transaction dollar volume in the third quarter and first 36 weeks of 2017. These increases were partially offset by the discontinuation of certain low-margin financial services programs, including certain co-branded general-purpose reloadable (“GPR”) cards.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—Decreased for the third quarter of 2017 due to a lower prepaid and processing revenue rate for open loop gift products, which resulted from a shift in mix from lower denomination cards to higher denomination cards due to the reduction of the impact from EMV restrictions. Prepaid and processing revenues as a percentage of transaction dollar volume was also impacted by a lower program management fee rate that will continue to decrease as a result of a contract amendment with MetaBank, our primary issuing bank, based on changing redemption patterns for open loop products. Prepaid and processing revenues as a percentage of transaction dollar volume for the first 36 weeks of 2017 did not change compared to the same period in 2016 primarily due to increased sales of higher-margin products and the discontinuation of certain low-margin financial services programs, offset by a lower prepaid and processing revenue rate for open loop gift cards and increased sales of lower-margin closed gift products.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Partner distribution expense as a percentage of prepaid and processing revenues increased for the third quarter of 2017 due to an increase in the proportion of closed loop sales through retail distribution partners with higher commission share rates. This impact was partially offset by higher sales of open loop gift cards which have a lower partner distribution expense as a percentage of prepaid and processing revenues. For the first 36 weeks of 2017, partner distribution expense as a percentage of prepaid and processing revenues decreased due to higher sales of open loop gift cards as well as an increase in sales through our online distribution channels which we do not incur partner distribution expense. This decrease was partially offset by a higher partner distribution expense as a percentage of prepaid and processing revenues on sales of our closed loop gift cards. The Company has recently experienced increasing competitive
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
80,671
|
|
|
$
|
63,803
|
|
|
$
|
16,868
|
|
|
26.4
|
%
|
Partner distribution expense
|
5,521
|
|
|
4,996
|
|
|
525
|
|
|
10.5
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
75,150
|
|
|
$
|
58,807
|
|
|
$
|
16,343
|
|
|
27.8
|
%
|
Prepaid and processing revenues
|
$
|
55,359
|
|
|
$
|
54,071
|
|
|
$
|
1,288
|
|
|
2.4
|
%
|
Partner distribution expense as a percentage of prepaid and processing revenues
|
10.0
|
%
|
|
9.2
|
%
|
|
0.8
|
%
|
|
8.7
|
%
|
|
36 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
224,598
|
|
|
$
|
184,576
|
|
|
$
|
40,022
|
|
|
21.7
|
%
|
Partner distribution expense
|
16,257
|
|
|
13,045
|
|
|
3,212
|
|
|
24.6
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
208,341
|
|
|
$
|
171,531
|
|
|
$
|
36,810
|
|
|
21.5
|
%
|
Prepaid and processing revenues
|
$
|
159,594
|
|
|
$
|
155,927
|
|
|
$
|
3,667
|
|
|
2.4
|
%
|
Partner distribution expense as a percentage of prepaid and processing revenues
|
10.2
|
%
|
|
8.4
|
%
|
|
1.8
|
%
|
|
21.4
|
%
|
•
|
Prepaid and processing revenues
—Prepaid and processing revenues increased
$1.3 million
in the third quarter of 2017, driven by the growth in our employee engagement business. Prepaid and processing revenues grew
$3.7 million
for the first 36 weeks of 2017 primarily due to an increase of
$5.9 million
in our employee engagement business and an increase of
$2.1 million
in our rebate and incentives processing business. This increase was partially offset by a one-time benefit of
$4.3 million
in the first 36 weeks of 2016 as a result of a contractual amendment with one of our issuing banks that did not repeat in 2017.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Increased for the third quarter and first 36 weeks of 2017 due to higher proportion of sales through business clients for which we recognize net pricing discounts as an expense.
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
134,168
|
|
|
$
|
101,879
|
|
|
$
|
32,289
|
|
|
31.7
|
%
|
Partner distribution expense
|
75,547
|
|
|
69,894
|
|
|
5,653
|
|
|
8.1
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
58,621
|
|
|
$
|
31,985
|
|
|
$
|
26,636
|
|
|
83.3
|
%
|
Prepaid and processing revenues
|
$
|
123,783
|
|
|
$
|
90,682
|
|
|
$
|
33,101
|
|
|
36.5
|
%
|
Partner distribution expense as a percentage of prepaid and processing revenues
|
61.0
|
%
|
|
77.1
|
%
|
|
(16.1
|
)%
|
|
(20.9
|
)%
|
|
36 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
415,280
|
|
|
$
|
285,670
|
|
|
$
|
129,610
|
|
|
45.4
|
%
|
Partner distribution expense
|
219,336
|
|
|
198,877
|
|
|
20,459
|
|
|
10.3
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
195,944
|
|
|
$
|
86,793
|
|
|
$
|
109,151
|
|
|
125.8
|
%
|
Prepaid and processing revenues
|
$
|
382,810
|
|
|
$
|
259,047
|
|
|
$
|
123,763
|
|
|
47.8
|
%
|
Partner distribution expense as a percentage of prepaid and processing revenues
|
57.3
|
%
|
|
76.8
|
%
|
|
(19.5
|
)%
|
|
(25.4
|
)%
|
•
|
Prepaid and processing revenues
—Our acquisition of The Grass Roots Group Holdings Limited and its subsidiaries (collectively, “Grass Roots”) in the fourth quarter of 2016 accounted for increases of
$21.7 million
and
$89.3 million
in prepaid and processing revenues for the
third
quarter and the first 36 weeks of
2017
, respectively, of which
$7.5 million
for the third quarter and
$42.9 million
for the first 36 weeks of 2017 related to the Meetings & Events business (see
Note 5
—
Consolidated Financial Statement Details
—Assets held for sale
). Prepaid and processing revenues also increased
$11.4 million
for the third quarter of 2017 due to increased sales volume in all regions, primarily Germany, South Korea, Brazil and Australia. Prepaid and processing revenues increased
$35.2 million
for the first 36 weeks of 2017, due to increased sales volume in all regions, primarily Germany, South Korea, Mexico and Australia.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Decreased mainly due to our acquisition of Grass Roots, which did not incur any partner distribution expense. Excluding Grass Roots, our partner distribution expense as a percentage of prepaid and processing revenue decreased from
77.1%
to
74.0%
for the third quarter and from
77.1%
to
74.7%
for the first 36 weeks of 2017. The decrease for both the third quarter and first 36 weeks of 2017 is due to higher sales of products which have lower partner distribution expense along with a decrease in proportion of sales through our sub-distributor relationships, primarily in Japan (for which we share a higher portion of commission but for which we incur minimal other operating expenses).
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Partner distribution expense
|
$
|
196,633
|
|
|
$
|
178,363
|
|
|
$
|
18,270
|
|
|
10.2
|
%
|
Processing and services
|
93,877
|
|
|
75,818
|
|
|
18,059
|
|
|
23.8
|
%
|
|||
Sales and marketing
|
58,711
|
|
|
52,327
|
|
|
6,384
|
|
|
12.2
|
%
|
|||
Costs of products sold
|
37,148
|
|
|
29,122
|
|
|
8,026
|
|
|
27.6
|
%
|
|||
General and administrative
|
24,122
|
|
|
21,773
|
|
|
2,349
|
|
|
10.8
|
%
|
|||
Transition and acquisition
|
665
|
|
|
2,574
|
|
|
(1,909
|
)
|
|
(74.2
|
)%
|
|||
Amortization of acquisition intangibles
|
13,904
|
|
|
10,376
|
|
|
3,528
|
|
|
34.0
|
%
|
|||
Change in fair value of contingent consideration
|
(2,100
|
)
|
|
1,300
|
|
|
(3,400
|
)
|
|
N/M
|
||||
Goodwill impairment
|
9,000
|
|
|
—
|
|
|
9,000
|
|
|
N/M
|
||||
Total operating expenses
|
$
|
431,960
|
|
|
$
|
371,653
|
|
|
$
|
60,307
|
|
|
16.2
|
%
|
|
36 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Partner distribution expense
|
$
|
577,634
|
|
|
$
|
541,749
|
|
|
$
|
35,885
|
|
|
6.6
|
%
|
Processing and services
|
303,829
|
|
|
226,634
|
|
|
77,195
|
|
|
34.1
|
%
|
|||
Sales and marketing
|
199,218
|
|
|
166,176
|
|
|
33,042
|
|
|
19.9
|
%
|
|||
Costs of products sold
|
117,882
|
|
|
103,163
|
|
|
14,719
|
|
|
14.3
|
%
|
|||
General and administrative
|
78,710
|
|
|
67,827
|
|
|
10,883
|
|
|
16.0
|
%
|
|||
Transition and acquisition
|
2,021
|
|
|
4,160
|
|
|
(2,139
|
)
|
|
(51.4
|
)%
|
|||
Amortization of acquisition intangibles
|
40,577
|
|
|
35,533
|
|
|
5,044
|
|
|
14.2
|
%
|
|||
Change in fair value of contingent consideration
|
(5,097
|
)
|
|
2,100
|
|
|
(7,197
|
)
|
|
N/M
|
||||
Goodwill impairment
|
9,000
|
|
|
—
|
|
|
9,000
|
|
|
N/M
|
||||
Total operating expenses
|
$
|
1,323,774
|
|
|
$
|
1,147,342
|
|
|
$
|
176,432
|
|
|
15.4
|
%
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|||||||
Interest income and other income (expense), net
|
$
|
631
|
|
|
$
|
2,360
|
|
|
$
|
(1,729
|
)
|
|
(73.3
|
)%
|
Interest expense
|
(7,374
|
)
|
|
(5,684
|
)
|
|
(1,690
|
)
|
|
29.7
|
%
|
|||
Total other income (expense)
|
$
|
(6,743
|
)
|
|
$
|
(3,324
|
)
|
|
$
|
(3,419
|
)
|
|
102.9
|
%
|
INCOME TAX EXPENSE (BENEFIT)
|
$
|
(11,858
|
)
|
|
$
|
(8,357
|
)
|
|
$
|
(3,501
|
)
|
|
41.9
|
%
|
EFFECTIVE TAX RATE
|
61.0
|
%
|
|
62.3
|
%
|
|
(1.3
|
)%
|
|
|
|
36 weeks ended
|
|
|
|
|
|||||||||
|
September 9, 2017
|
|
September 10, 2016
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|||||||
Interest income and other income (expense), net
|
$
|
2,134
|
|
|
$
|
3,258
|
|
|
$
|
(1,124
|
)
|
|
(34.5
|
)%
|
Interest expense
|
(21,368
|
)
|
|
(13,868
|
)
|
|
(7,500
|
)
|
|
54.1
|
%
|
|||
Total other income (expense)
|
$
|
(19,234
|
)
|
|
$
|
(10,610
|
)
|
|
$
|
(8,624
|
)
|
|
81.3
|
%
|
INCOME TAX EXPENSE (BENEFIT)
|
$
|
(26,224
|
)
|
|
$
|
(18,884
|
)
|
|
$
|
(7,340
|
)
|
|
38.9
|
%
|
EFFECTIVE TAX RATE
|
49.1
|
%
|
|
48.8
|
%
|
|
0.3
|
%
|
|
|
|
36 weeks ended
|
||||||
|
September 9, 2017
|
|
September 10, 2016
|
||||
|
(in thousands)
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(641,277
|
)
|
|
$
|
(639,637
|
)
|
Net cash (used in) provided by investing activities
|
(220,803
|
)
|
|
(177,018
|
)
|
||
Net cash (used in) provided by financing activities
|
142,762
|
|
|
199,076
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
16,097
|
|
|
3,352
|
|
||
Decrease in cash and cash equivalents
|
$
|
(703,221
|
)
|
|
$
|
(614,227
|
)
|
•
|
an increase of
$44.4 million
cash provided by non-settlement related operating assets and liabilities for the
36 weeks ended
September 9, 2017
compared to the
36 weeks ended
September 10, 2016
, due to an increase in our operating liabilities; partially offset by
|
•
|
a decrease of
$7.1 million
cash provided by income tax related receivables and payables for the
36 weeks ended
September 9, 2017
compared to the
36 weeks ended
September 10, 2016
, due to a non-recurring income tax refund of $7.5 million received in the
36 weeks ended
September 10, 2016
.
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share (2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
June 18, 2017 to July 15, 2017
|
|
45
|
|
|
$
|
43.60
|
|
|
—
|
|
|
$
|
—
|
|
July 16, 2017 to August 12, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
August 13, 2017 to September 09, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
45
|
|
|
$
|
43.60
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
This table does not include shares of common stock that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting of restricted stock units or exercise of options or stock appreciation rights. The numbers represent the shares of common stock that we withheld in order to satisfy minimum tax withholding requirements in connection with the vesting of restricted stock awards.
|
(2)
|
Average price paid per share of common stock does not include brokerage commissions.
|
Blackhawk Network Holdings, Inc.
|
|
/s/ Jerry Ulrich
|
Jerry Ulrich
|
Chief Financial Officer and Chief Administrative Officer
|
(Principal Financial Officer and Duly Authorized Signatory)
|
|
|
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
||||||
Exhibit No
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
|
10.1
|
|
|
|
|
|
|
|
|
|
|
|
X
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
X
|
10.3†
|
|
|
|
|
|
|
|
|
|
|
|
X
|
31.1
|
|
|
|
|
|
|
|
|
|
|
|
X
|
31.2
|
|
|
|
|
|
|
|
|
|
|
|
X
|
32.1*
|
|
|
|
|
|
|
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
|
|
X
|
†
|
Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the SEC.
|
*
|
The certification attached as Exhibit 32.1 to this Quarterly Report is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Quarterly Report), irrespective of any general incorporation language contained in such filing.
|
1 Year BLACKHAWK NETWORK HOLDINGS, INC Chart |
1 Month BLACKHAWK NETWORK HOLDINGS, INC Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions