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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 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
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43-2099257
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(State or Other Jurisdiction of
Incorporation or Organization)
|
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(I.R.S. Employer
Identification No.)
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||
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6220 Stoneridge Mall Road
Pleasanton, CA
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94588
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
|
|
ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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PART I. FINANCIAL STATEMENTS
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Item 1.
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||
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Item 2.
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Item 3.
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Item 4.
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||
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PART II. OTHER INFORMATION
|
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Item 1.
|
||
Item 1A.
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Item 2.
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Item 3.
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Item 4.
|
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Item 5.
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Item 6.
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||
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March 24, 2018
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|
December 30, 2017
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March 25, 2017
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||||||
ASSETS
|
|
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|
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||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
351,099
|
|
|
$
|
1,096,195
|
|
|
$
|
214,536
|
|
Restricted cash
|
69,781
|
|
|
135,345
|
|
|
56,832
|
|
|||
Settlement receivables, net
|
416,633
|
|
|
1,038,347
|
|
|
319,557
|
|
|||
Accounts receivable, net
|
152,262
|
|
|
185,741
|
|
|
259,138
|
|
|||
Other current assets
|
158,301
|
|
|
142,737
|
|
|
165,898
|
|
|||
Total current assets
|
1,148,076
|
|
|
2,598,365
|
|
|
1,015,961
|
|
|||
Property, equipment and technology, net
|
172,132
|
|
|
172,607
|
|
|
173,403
|
|
|||
Intangible assets, net
|
417,946
|
|
|
430,978
|
|
|
338,672
|
|
|||
Goodwill
|
565,913
|
|
|
563,405
|
|
|
570,313
|
|
|||
Deferred income taxes
|
235,860
|
|
|
235,797
|
|
|
361,981
|
|
|||
Other assets
|
185,739
|
|
|
121,667
|
|
|
91,166
|
|
|||
TOTAL ASSETS
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$
|
2,725,666
|
|
|
$
|
4,122,819
|
|
|
$
|
2,551,496
|
|
|
|
|
|
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||||||
See accompanying notes to condensed consolidated financial statements
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except par value)
(Unaudited)
|
|||||||||||
|
March 24, 2018
|
|
December 30, 2017
|
|
March 25, 2017
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
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|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Settlement payables
|
$
|
683,027
|
|
|
$
|
2,074,673
|
|
|
$
|
547,179
|
|
Consumer and customer deposits
|
321,970
|
|
|
326,685
|
|
|
269,026
|
|
|||
Accounts payable and accrued operating expenses
|
125,073
|
|
|
156,182
|
|
|
143,430
|
|
|||
Contract liabilities
|
54,088
|
|
|
60,607
|
|
|
46,867
|
|
|||
Note payable, current portion
|
14,912
|
|
|
10,662
|
|
|
7,390
|
|
|||
Notes payable to Safeway
|
3,941
|
|
|
3,941
|
|
|
2,909
|
|
|||
Bank line of credit
|
—
|
|
|
—
|
|
|
14,415
|
|
|||
Other current liabilities
|
56,453
|
|
|
102,823
|
|
|
85,651
|
|
|||
Total current liabilities
|
1,259,464
|
|
|
2,735,573
|
|
|
1,116,867
|
|
|||
Deferred income taxes
|
29,648
|
|
|
29,085
|
|
|
28,796
|
|
|||
Note payable
|
258,315
|
|
|
202,441
|
|
|
130,560
|
|
|||
Convertible notes payable
|
444,707
|
|
|
441,655
|
|
|
431,941
|
|
|||
Other liabilities
|
44,967
|
|
|
38,877
|
|
|
53,635
|
|
|||
Total liabilities
|
2,037,101
|
|
|
3,447,631
|
|
|
1,761,799
|
|
|||
Commitments and contingencies (see Note 9)
|
|
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|
|
|
||||||
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; 57,097, 55,767 and 56,290 shares outstanding, respectively
|
57
|
|
|
56
|
|
|
56
|
|
|||
Additional paid-in capital
|
670,756
|
|
|
649,546
|
|
|
612,328
|
|
|||
Treasury stock
|
(40,023
|
)
|
|
(40,023
|
)
|
|
—
|
|
|||
Accumulated other comprehensive loss
|
(8,362
|
)
|
|
(16,121
|
)
|
|
(42,967
|
)
|
|||
Retained earnings
|
62,097
|
|
|
77,864
|
|
|
216,001
|
|
|||
Total Blackhawk Network Holdings, Inc. equity
|
684,525
|
|
|
671,322
|
|
|
785,418
|
|
|||
Non-controlling interests
|
4,040
|
|
|
3,866
|
|
|
4,279
|
|
|||
Total stockholders’ equity
|
688,565
|
|
|
675,188
|
|
|
789,697
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
2,725,666
|
|
|
$
|
4,122,819
|
|
|
$
|
2,551,496
|
|
|
12 weeks ended
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
||||
OPERATING REVENUES:
|
|
|
|
||||
Commissions and fees
|
$
|
288,626
|
|
|
$
|
249,525
|
|
Program and other fees
|
101,402
|
|
|
95,865
|
|
||
Marketing
|
14,367
|
|
|
14,281
|
|
||
Product sales
|
24,813
|
|
|
26,741
|
|
||
Total operating revenues
|
429,208
|
|
|
386,412
|
|
||
OPERATING EXPENSES:
|
|
|
|
||||
Partner distribution expense
|
218,449
|
|
|
175,123
|
|
||
Processing and services
|
92,949
|
|
|
101,021
|
|
||
Sales and marketing
|
64,181
|
|
|
62,658
|
|
||
Costs of products sold
|
24,256
|
|
|
27,849
|
|
||
General and administrative
|
29,322
|
|
|
29,025
|
|
||
Transition and acquisition
|
4,927
|
|
|
451
|
|
||
Amortization of acquisition intangibles
|
14,107
|
|
|
12,562
|
|
||
Change in fair value of contingent consideration
|
100
|
|
|
1,040
|
|
||
Total operating expenses
|
448,291
|
|
|
409,729
|
|
||
OPERATING INCOME (LOSS)
|
(19,083
|
)
|
|
(23,317
|
)
|
||
OTHER INCOME (EXPENSE):
|
|
|
|
||||
Interest income and other income (expense), net
|
(224
|
)
|
|
836
|
|
||
Interest expense
|
(7,786
|
)
|
|
(6,943
|
)
|
||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
|
(27,093
|
)
|
|
(29,424
|
)
|
||
INCOME TAX EXPENSE (BENEFIT)
|
(11,505
|
)
|
|
(12,082
|
)
|
||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(15,588
|
)
|
|
(17,342
|
)
|
||
Loss (income) attributable to non-controlling interests, net of tax
|
(179
|
)
|
|
(123
|
)
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(15,767
|
)
|
|
$
|
(17,465
|
)
|
EARNINGS (LOSS) PER SHARE:
|
|
|
|
||||
Basic
|
$
|
(0.28
|
)
|
|
$
|
(0.31
|
)
|
Diluted
|
$
|
(0.28
|
)
|
|
$
|
(0.31
|
)
|
Weighted average shares outstanding—basic
|
56,477
|
|
|
55,904
|
|
||
Weighted average shares outstanding—diluted
|
56,477
|
|
|
55,904
|
|
|
12 weeks ended
|
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
||||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
$
|
(15,588
|
)
|
|
$
|
(17,342
|
)
|
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Currency translation adjustments
|
7,752
|
|
|
5,975
|
|
|
||
COMPREHENSIVE INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(7,836
|
)
|
|
(11,367
|
)
|
|
||
Comprehensive loss (income) attributable to non-controlling interests, net of tax
|
—
|
|
|
(82
|
)
|
|
||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(7,836
|
)
|
|
$
|
(11,449
|
)
|
|
|
12 weeks ended
|
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
||||
OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income (loss) before allocation to non-controlling interests
|
$
|
(15,588
|
)
|
|
$
|
(17,342
|
)
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation and amortization of property, equipment and technology
|
12,148
|
|
|
11,600
|
|
|
||
Amortization of intangibles
|
15,951
|
|
|
13,755
|
|
|
||
Amortization of deferred program and contract costs
|
7,905
|
|
|
7,397
|
|
|
||
Amortization of deferred financing costs and debt discount
|
2,860
|
|
|
3,162
|
|
|
||
Loss on property, equipment and technology disposal/write-down
|
16
|
|
|
108
|
|
|
||
Employee stock-based compensation expense
|
8,062
|
|
|
8,401
|
|
|
||
Change in fair value of contingent consideration
|
100
|
|
|
1,040
|
|
|
||
Deferred income taxes
|
—
|
|
|
(2,307
|
)
|
|
||
Other
|
2,942
|
|
|
1,605
|
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Settlement receivables
|
634,105
|
|
|
330,177
|
|
|
||
Settlement payables
|
(1,401,302
|
)
|
|
(1,080,989
|
)
|
|
||
Accounts receivable, current and long-term
|
29,788
|
|
|
(7,666
|
)
|
|
||
Other current assets
|
(3,273
|
)
|
|
(7,146
|
)
|
|
||
Other assets
|
(63,174
|
)
|
|
(3,037
|
)
|
|
||
Consumer and customer deposits
|
(13,424
|
)
|
|
32,018
|
|
|
||
Accounts payable and accrued operating expenses
|
(27,065
|
)
|
|
(4,645
|
)
|
|
||
Contract liabilities
|
(6,673
|
)
|
|
2,980
|
|
|
||
Other current and long-term liabilities
|
(21,820
|
)
|
|
635
|
|
|
||
Income taxes, net
|
(14,642
|
)
|
|
(9,944
|
)
|
|
||
Net cash (used in) provided by operating activities
|
(853,084
|
)
|
|
(720,198
|
)
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
|
||||
Expenditures for property, equipment and technology
|
(15,819
|
)
|
|
(16,697
|
)
|
|
||
Business acquisitions, net of cash acquired
|
—
|
|
|
(10,881
|
)
|
|
||
Investment in unconsolidated entities
|
—
|
|
|
(5,200
|
)
|
|
||
Other
|
(1,000
|
)
|
|
—
|
|
|
||
Net cash (used in) provided by investing activities
|
(16,819
|
)
|
|
(32,778
|
)
|
|
||
|
|
|
|
|
||||
|
|
|
|
|
||||
See accompanying notes to condensed consolidated financial statements
|
BLACKHAWK NETWORK HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)
|
||||||||
|
12 weeks ended
|
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
||||
FINANCING ACTIVITIES:
|
|
|
|
|
||||
Payments for acquisition liability
|
(2,000
|
)
|
|
—
|
|
|
||
Proceeds from issuance of note payable
|
75,000
|
|
|
—
|
|
|
||
Repayment of note payable
|
(15,000
|
)
|
|
(10,000
|
)
|
|
||
Borrowings under revolving bank line of credit
|
127,536
|
|
|
667,936
|
|
|
||
Repayments on revolving bank line of credit
|
(127,536
|
)
|
|
(653,521
|
)
|
|
||
Repayment on notes payable to Safeway
|
—
|
|
|
(254
|
)
|
|
||
Proceeds from issuance of common stock from exercise of employee stock options and employee stock purchase plans
|
10,924
|
|
|
3,700
|
|
|
||
Other stock-based compensation related
|
(18,254
|
)
|
|
(8,897
|
)
|
|
||
Net cash (used in) provided by financing activities
|
50,670
|
|
|
(1,036
|
)
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
8,573
|
|
|
6,462
|
|
|
||
Decrease in cash, cash equivalents and restricted cash
|
(810,660
|
)
|
|
(747,550
|
)
|
|
||
Cash, cash equivalents and restricted cash—beginning of period
|
1,231,540
|
|
|
1,018,918
|
|
|
||
Cash, cash equivalents and restricted cash—end of period
|
$
|
420,880
|
|
|
$
|
271,368
|
|
|
|
|
|
|
|
||||
NONCASH FINANCING AND INVESTING ACTIVITIES:
|
|
|
|
|
||||
Financing of business acquisition with contingent consideration
|
$
|
—
|
|
|
$
|
2,000
|
|
|
|
March 24, 2018
|
|
March 25, 2017
|
||||
Cash and cash equivalents
|
$
|
351,099
|
|
|
$
|
214,536
|
|
Restricted cash
|
69,781
|
|
|
56,832
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
420,880
|
|
|
$
|
271,368
|
|
|
March 24, 2018
|
|
December 30, 2017
|
|
March 25, 2017
|
||||||
Accounts receivables, net
|
$
|
152,262
|
|
|
$
|
185,741
|
|
|
$
|
259,138
|
|
|
|
|
|
|
|
||||||
Unbilled receivables, current
|
$
|
143,824
|
|
|
$
|
193,734
|
|
|
$
|
167,392
|
|
Unbilled receivables, long-term
|
11,265
|
|
|
9,235
|
|
|
1,475
|
|
|||
Total unbilled receivables
|
$
|
155,089
|
|
|
$
|
202,969
|
|
|
$
|
168,867
|
|
|
|
|
|
|
|
||||||
Contract liabilities, current
|
$
|
54,088
|
|
|
$
|
60,607
|
|
|
$
|
46,867
|
|
Contract liabilities, long-term
|
24,463
|
|
|
23,897
|
|
|
16,318
|
|
|||
Total contract liabilities
|
$
|
78,551
|
|
|
$
|
84,504
|
|
|
$
|
63,185
|
|
|
12 weeks ended
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
||||
Balance, beginning of period
|
$
|
84,504
|
|
|
$
|
63,410
|
|
Revenue recognized that was included in the contract liability balance at beginning of period
|
(51,790
|
)
|
|
(39,222
|
)
|
||
Deferrals, excluding amounts recognized as revenue during the period
|
45,625
|
|
|
38,799
|
|
||
Exchange rate effect
|
212
|
|
|
198
|
|
||
Balance, end of period
|
$
|
78,551
|
|
|
$
|
63,185
|
|
|
12 weeks ended
|
||||||||||||||
|
March 24, 2018
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Total
|
||||||||
Card services
—
physical retail (1)
|
$
|
185,625
|
|
|
$
|
—
|
|
|
$
|
118,171
|
|
|
$
|
303,796
|
|
Card services
—
e-commerce (2)
|
25,787
|
|
|
12,921
|
|
|
—
|
|
|
38,708
|
|
||||
Marketing services (3)
|
5,770
|
|
|
—
|
|
|
8,597
|
|
|
14,367
|
|
||||
Other services (4)
|
14,753
|
|
|
44,533
|
|
|
13,051
|
|
|
72,337
|
|
||||
|
$
|
231,935
|
|
|
$
|
57,454
|
|
|
$
|
139,819
|
|
|
$
|
429,208
|
|
|
12 weeks ended
|
||||||||||||||
|
March 25, 2017
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Total
|
||||||||
Card services—physical retail (1)
|
$
|
159,647
|
|
|
$
|
—
|
|
|
$
|
98,097
|
|
|
$
|
257,744
|
|
Card services—e-commerce (2)
|
11,459
|
|
|
8,719
|
|
|
—
|
|
|
20,178
|
|
||||
Marketing services (3)
|
7,309
|
|
|
—
|
|
|
6,972
|
|
|
14,281
|
|
||||
Other services (4)
|
19,558
|
|
|
44,541
|
|
|
30,110
|
|
|
94,209
|
|
||||
|
$
|
197,973
|
|
|
$
|
53,260
|
|
|
$
|
135,179
|
|
|
$
|
386,412
|
|
|
As of December 30, 2017
|
||||||||||
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Assets:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
$
|
184,994
|
|
|
$
|
747
|
|
|
$
|
185,741
|
|
Other current assets
|
$
|
165,374
|
|
|
$
|
(22,637
|
)
|
|
$
|
142,737
|
|
Intangible assets, net
|
$
|
431,681
|
|
|
$
|
(703
|
)
|
|
$
|
430,978
|
|
Deferred income taxes
|
$
|
236,496
|
|
|
$
|
(699
|
)
|
|
$
|
235,797
|
|
Other assets
|
$
|
115,236
|
|
|
$
|
6,431
|
|
|
$
|
121,667
|
|
Total assets
|
$
|
4,139,680
|
|
|
$
|
(16,861
|
)
|
|
$
|
4,122,819
|
|
Liabilities:
|
|
|
|
|
|
||||||
Consumer and customer deposits
|
$
|
252,822
|
|
|
$
|
73,863
|
|
|
$
|
326,685
|
|
Contract liabilities
(previously reported as Deferred revenue)
|
$
|
179,684
|
|
|
$
|
(119,077
|
)
|
|
$
|
60,607
|
|
Deferred income taxes, long term
|
$
|
28,083
|
|
|
$
|
1,002
|
|
|
$
|
29,085
|
|
Other liabilities
|
$
|
16,747
|
|
|
$
|
22,130
|
|
|
$
|
38,877
|
|
Total liabilities
|
$
|
3,469,713
|
|
|
$
|
(22,082
|
)
|
|
$
|
3,447,631
|
|
Stockholders’ equity:
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss
|
$
|
(16,049
|
)
|
|
$
|
(72
|
)
|
|
$
|
(16,121
|
)
|
Retained earnings
|
$
|
72,571
|
|
|
$
|
5,293
|
|
|
$
|
77,864
|
|
Total stockholder’s equity
|
$
|
669,967
|
|
|
$
|
5,221
|
|
|
$
|
675,188
|
|
|
As of March 25, 2017
|
||||||||||
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Assets:
|
|
|
|
|
|
||||||
Other current assets
|
$
|
177,463
|
|
|
$
|
(11,565
|
)
|
|
$
|
165,898
|
|
Intangible assets, net
|
$
|
340,846
|
|
|
$
|
(2,174
|
)
|
|
$
|
338,672
|
|
Deferred income taxes
|
$
|
361,404
|
|
|
$
|
577
|
|
|
$
|
361,981
|
|
Other assets
|
$
|
85,647
|
|
|
$
|
5,519
|
|
|
$
|
91,166
|
|
Total assets
|
$
|
2,559,139
|
|
|
$
|
(7,643
|
)
|
|
$
|
2,551,496
|
|
Liabilities:
|
|
|
|
|
|
||||||
Consumer and customer deposits
|
$
|
199,822
|
|
|
$
|
69,204
|
|
|
$
|
269,026
|
|
Accounts payable
|
$
|
143,858
|
|
|
$
|
(428
|
)
|
|
$
|
143,430
|
|
Contract liabilities
(previously reported as Deferred revenue)
|
$
|
140,834
|
|
|
$
|
(93,967
|
)
|
|
$
|
46,867
|
|
Deferred income taxes, long term
|
$
|
28,200
|
|
|
$
|
596
|
|
|
$
|
28,796
|
|
Other liabilities
|
$
|
37,745
|
|
|
$
|
15,890
|
|
|
$
|
53,635
|
|
Total liabilities
|
$
|
1,770,504
|
|
|
$
|
(8,705
|
)
|
|
$
|
1,761,799
|
|
Stockholders’ equity:
|
|
|
|
|
|
||||||
Accumulated other comprehensive loss
|
$
|
(42,861
|
)
|
|
$
|
(106
|
)
|
|
$
|
(42,967
|
)
|
Retained earnings
|
$
|
214,833
|
|
|
$
|
1,168
|
|
|
$
|
216,001
|
|
Total stockholder’s equity
|
$
|
788,635
|
|
|
$
|
1,062
|
|
|
$
|
789,697
|
|
|
12 weeks ended
|
||||||||||
|
For the quarter ended March 25, 2017
|
||||||||||
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Operating revenues:
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
255,206
|
|
|
$
|
(5,681
|
)
|
|
$
|
249,525
|
|
Program and other fees
|
$
|
100,910
|
|
|
$
|
(5,045
|
)
|
|
$
|
95,865
|
|
Product sales
|
$
|
36,839
|
|
|
$
|
(10,098
|
)
|
|
$
|
26,741
|
|
Total operating revenues
|
$
|
407,236
|
|
|
$
|
(20,824
|
)
|
|
$
|
386,412
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Partner distribution expense
|
$
|
179,476
|
|
|
$
|
(4,353
|
)
|
|
$
|
175,123
|
|
Processing and services
|
$
|
102,272
|
|
|
$
|
(1,251
|
)
|
|
$
|
101,021
|
|
Sales and marketing
|
$
|
62,785
|
|
|
$
|
(127
|
)
|
|
$
|
62,658
|
|
Costs of products sold
|
$
|
36,193
|
|
|
$
|
(8,344
|
)
|
|
$
|
27,849
|
|
Amortization of acquisition intangibles
|
$
|
13,025
|
|
|
$
|
(463
|
)
|
|
$
|
12,562
|
|
Total operating expenses
|
$
|
424,267
|
|
|
$
|
(14,538
|
)
|
|
$
|
409,729
|
|
Income tax expense (benefit)
|
$
|
(9,775
|
)
|
|
$
|
(2,307
|
)
|
|
$
|
(12,082
|
)
|
Net income (loss) attributable to Blackhawk Network Holdings, Inc.
|
$
|
(13,486
|
)
|
|
$
|
(3,979
|
)
|
|
$
|
(17,465
|
)
|
Diluted earnings (loss) per share
|
$
|
(0.24
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.31
|
)
|
|
12 weeks ended
|
||||||||||
|
March 25, 2017
|
||||||||||
|
As Previously Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Net loss
|
$
|
(13,363
|
)
|
|
$
|
(3,979
|
)
|
|
$
|
(17,342
|
)
|
Amortization of intangibles
|
$
|
14,218
|
|
|
$
|
(463
|
)
|
|
$
|
13,755
|
|
Deferred income taxes
|
$
|
—
|
|
|
$
|
(2,307
|
)
|
|
$
|
(2,307
|
)
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Other current assets
|
$
|
(2,215
|
)
|
|
$
|
(4,931
|
)
|
|
$
|
(7,146
|
)
|
Other assets
|
$
|
(3,158
|
)
|
|
$
|
121
|
|
|
$
|
(3,037
|
)
|
Consumer and customer deposits
|
$
|
(24,484
|
)
|
|
$
|
56,502
|
|
|
$
|
32,018
|
|
Accounts payable and accrued operating expenses
|
$
|
(4,218
|
)
|
|
$
|
(427
|
)
|
|
$
|
(4,645
|
)
|
Contract liabilities
(previously reported as Deferred revenue)
|
$
|
3,585
|
|
|
$
|
(605
|
)
|
|
$
|
2,980
|
|
Other current and long-term liabilities
|
$
|
(1,403
|
)
|
|
$
|
2,038
|
|
|
$
|
635
|
|
Net cash provided (used in ) by operating activities
|
$
|
(766,147
|
)
|
|
$
|
45,949
|
|
|
$
|
(720,198
|
)
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
$
|
6,372
|
|
|
$
|
90
|
|
|
$
|
6,462
|
|
Increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
(793,589
|
)
|
|
$
|
46,039
|
|
|
$
|
(747,550
|
)
|
Cash, cash equivalents and restricted cash—beginning of period
|
$
|
1,008,125
|
|
|
$
|
10,793
|
|
|
$
|
1,018,918
|
|
Cash, cash equivalents and restricted cash—end of period
|
$
|
214,536
|
|
|
$
|
56,832
|
|
|
$
|
271,368
|
|
|
March 24, 2018
|
||
2019
|
$
|
15,000
|
|
2020
|
30,000
|
|
|
2021
|
230,000
|
|
|
2022
|
500,000
|
|
|
Total long-term debt
|
$
|
775,000
|
|
|
March 24, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
43,236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,236
|
|
Contingent asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,413
|
|
|
$
|
6,413
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,029
|
|
|
$
|
4,029
|
|
|
December 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
694,075
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
694,075
|
|
Contingent asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,131
|
|
|
$
|
6,131
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Warrants
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,886
|
|
|
$
|
3,886
|
|
|
March 25, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Money market mutual funds
|
$
|
4,073
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,073
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,096
|
|
|
$
|
21,096
|
|
|
12 weeks ended
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
||||
Balance, beginning of period
|
$
|
3,886
|
|
|
$
|
23,752
|
|
Additions from acquisitions
|
—
|
|
|
2,000
|
|
||
Foreign currency translation adjustments
|
43
|
|
|
—
|
|
||
Change in fair value of contingent consideration
|
100
|
|
|
1,040
|
|
||
Settlement
|
—
|
|
|
(5,696
|
)
|
||
Balance, end of period
|
$
|
4,029
|
|
|
$
|
21,096
|
|
|
March 24, 2018
|
|
December 30, 2017
|
|
March 25, 2017
|
||||||
Other current assets:
|
|
|
|
|
|
||||||
Inventory
|
$
|
38,663
|
|
|
$
|
37,007
|
|
|
$
|
48,683
|
|
Deferred expenses
|
4,894
|
|
|
5,831
|
|
|
3,334
|
|
|||
Income tax receivables
|
18,547
|
|
|
10,823
|
|
|
22,960
|
|
|||
Contract asset
|
540
|
|
|
702
|
|
|
1,657
|
|
|||
Other
|
68,451
|
|
|
64,912
|
|
|
44,313
|
|
|||
Assets held for sale
|
27,206
|
|
|
23,462
|
|
|
44,951
|
|
|||
Total other current assets
|
$
|
158,301
|
|
|
$
|
142,737
|
|
|
$
|
165,898
|
|
Other assets:
|
|
|
|
|
|
||||||
Deferred program and contract costs
|
$
|
118,819
|
|
|
$
|
60,000
|
|
|
$
|
48,678
|
|
Other receivables
|
11,265
|
|
|
9,235
|
|
|
1,475
|
|
|||
Income tax receivables
|
2,323
|
|
|
2,321
|
|
|
2,358
|
|
|||
Deferred financing costs
|
2,579
|
|
|
2,759
|
|
|
2,552
|
|
|||
Contract asset
|
—
|
|
|
—
|
|
|
516
|
|
|||
Other
|
50,753
|
|
|
47,352
|
|
|
35,587
|
|
|||
Total other assets
|
$
|
185,739
|
|
|
$
|
121,667
|
|
|
$
|
91,166
|
|
Other current liabilities:
|
|
|
|
|
|
||||||
Payroll and related liabilities
|
$
|
34,693
|
|
|
$
|
43,022
|
|
|
$
|
28,198
|
|
Income taxes payable
|
1,841
|
|
|
8,056
|
|
|
3,860
|
|
|||
Acquisition liability
|
2,329
|
|
|
4,012
|
|
|
9,047
|
|
|||
Warrant liability
|
—
|
|
|
20,000
|
|
|
—
|
|
|||
Other payables and accrued liabilities
|
15,353
|
|
|
25,292
|
|
|
9,836
|
|
|||
Liabilities held for sale
|
2,237
|
|
|
2,441
|
|
|
34,710
|
|
|||
Total other current liabilities
|
$
|
56,453
|
|
|
$
|
102,823
|
|
|
$
|
85,651
|
|
Other liabilities:
|
|
|
|
|
|
||||||
Contingent consideration
|
$
|
1,700
|
|
|
$
|
1,874
|
|
|
$
|
17,744
|
|
Income taxes payable
|
3,393
|
|
|
3,883
|
|
|
7,056
|
|
|||
Contract liability
|
24,463
|
|
|
23,897
|
|
|
16,318
|
|
|||
Other long-term liabilities
|
15,411
|
|
|
9,223
|
|
|
12,517
|
|
|||
Total other liabilities
|
$
|
44,967
|
|
|
$
|
38,877
|
|
|
$
|
53,635
|
|
|
March 24, 2018
|
||
Other current assets
|
$
|
6,349
|
|
Property, equipment and technology, net
|
8,467
|
|
|
Goodwill
|
8,991
|
|
|
Intangible assets, net
|
431
|
|
|
Total assets
|
$
|
24,238
|
|
|
|
||
Accounts payable and accrued operating expenses
|
$
|
1,468
|
|
Other current liabilities
|
377
|
|
|
Contract liabilities
|
392
|
|
|
Total liabilities
|
$
|
2,237
|
|
|
March 24, 2018
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Total
|
||||||||
Balance, beginning of period
|
$
|
132,660
|
|
|
$
|
335,298
|
|
|
$
|
95,447
|
|
|
$
|
563,405
|
|
Foreign currency translation adjustments
|
—
|
|
|
(814
|
)
|
|
3,322
|
|
|
2,508
|
|
||||
Balance, end of period
|
$
|
132,660
|
|
|
$
|
334,484
|
|
|
$
|
98,769
|
|
|
$
|
565,913
|
|
|
12 weeks ended
|
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
||||
Processing and services
|
$
|
1,779
|
|
|
$
|
1,702
|
|
|
Sales and marketing
|
2,558
|
|
|
2,812
|
|
|
||
Cost of products sold
|
16
|
|
|
17
|
|
|
||
General and administrative
|
3,709
|
|
|
3,870
|
|
|
||
Total stock-based compensation expense
|
$
|
8,062
|
|
|
$
|
8,401
|
|
|
|
Distribution Partner Commitments
|
||
2018
|
$
|
62,088
|
|
2019
|
67,772
|
|
|
2020
|
50,458
|
|
|
2021
|
46,751
|
|
|
2022 and after
|
86,574
|
|
|
Distribution partner commissions (uncertainty in timing of future payments)
|
6,232
|
|
|
Total
|
$
|
319,875
|
|
|
12 weeks ended
|
||||||||||||||
|
March 24, 2018
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Consolidated
|
||||||||
Total operating revenues
|
$
|
231,935
|
|
|
$
|
57,454
|
|
|
$
|
139,819
|
|
|
$
|
429,208
|
|
Partner distribution expense
|
130,190
|
|
|
5,027
|
|
|
83,232
|
|
|
218,449
|
|
||||
Operating revenues, net of Partner distribution expense
|
101,745
|
|
|
52,427
|
|
|
56,587
|
|
|
210,759
|
|
||||
Other operating expenses
|
108,777
|
|
|
59,076
|
|
|
61,989
|
|
|
229,842
|
|
||||
Segment profit (loss) / Operating income (loss)
|
$
|
(7,032
|
)
|
|
$
|
(6,649
|
)
|
|
$
|
(5,402
|
)
|
|
$
|
(19,083
|
)
|
Other income (expense)
|
|
|
|
|
|
|
(8,010
|
)
|
|||||||
Income (loss) before income tax expense
|
|
|
|
|
|
|
$
|
(27,093
|
)
|
||||||
Noncash charges
|
$
|
18,158
|
|
|
$
|
14,870
|
|
|
$
|
8,370
|
|
|
|
|
|
12 weeks ended
|
||||||||||||||
|
March 25, 2017
|
||||||||||||||
|
U.S. Retail
|
|
Incentives & Rewards
|
|
International
|
|
Consolidated
|
||||||||
Total operating revenues
|
$
|
197,973
|
|
|
$
|
53,260
|
|
|
$
|
135,179
|
|
|
$
|
386,412
|
|
Partner distribution expense
|
97,978
|
|
|
3,856
|
|
|
73,289
|
|
|
175,123
|
|
||||
Operating revenues, net of Partner distribution expense
|
99,995
|
|
|
49,404
|
|
|
61,890
|
|
|
211,289
|
|
||||
Other operating expenses
|
108,604
|
|
|
56,827
|
|
|
69,175
|
|
|
234,606
|
|
||||
Segment profit (loss) / Operating income (loss)
|
$
|
(8,609
|
)
|
|
$
|
(7,423
|
)
|
|
$
|
(7,285
|
)
|
|
$
|
(23,317
|
)
|
Other income (expense)
|
|
|
|
|
|
|
(6,107
|
)
|
|||||||
Income (loss) before income tax expense
|
|
|
|
|
|
|
$
|
(29,424
|
)
|
||||||
Noncash charges
|
$
|
13,856
|
|
|
$
|
14,718
|
|
|
$
|
7,829
|
|
|
|
|
12 weeks ended
|
||||||||||||||
|
March 24, 2018
|
|
March 25, 2017
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
Net income (loss) attributable to common stockholders
|
$
|
(15,767
|
)
|
|
$
|
(15,767
|
)
|
|
$
|
(17,465
|
)
|
|
$
|
(17,465
|
)
|
Weighted-average common shares outstanding
|
56,477
|
|
|
56,477
|
|
|
55,904
|
|
|
55,904
|
|
||||
Common share equivalents
|
|
|
—
|
|
|
|
|
|
—
|
|
|||||
Weighted-average shares outstanding
|
|
|
56,477
|
|
|
|
|
55,904
|
|
||||||
Earnings (loss) per share
|
$
|
(0.28
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.31
|
)
|
|
12 weeks ended
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
||||
|
|
|
|
||||
|
(in thousands, except percentages and per share amounts)
|
||||||
Prepaid and processing revenues:
|
|
|
|
||||
Commissions and fees
|
$
|
288,626
|
|
|
$
|
249,525
|
|
Program and other fees
|
101,402
|
|
|
95,865
|
|
||
Prepaid and processing revenues
|
$
|
390,028
|
|
|
$
|
345,390
|
|
Partner distribution expense as % of prepaid and processing revenues
|
56.0
|
%
|
|
50.7
|
%
|
||
Total operating revenues
|
$
|
429,208
|
|
|
$
|
386,412
|
|
Revenue adjustment from purchase accounting (2)
|
520
|
|
|
1,574
|
|
||
Marketing revenue and other pass-through revenue
|
(17,708
|
)
|
|
(16,980
|
)
|
||
Partner distribution expense
|
(218,449
|
)
|
|
(175,123
|
)
|
||
Adjusted operating revenues (1)
|
$
|
193,571
|
|
|
$
|
195,883
|
|
(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 March 24, 2018
|
|
% of Total Operating Revenues
|
|
12 weeks ended March 25, 2017
|
|
% of Total Operating Revenues
|
||||||
|
(in thousands, except percentages)
|
||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
288,626
|
|
|
67.2
|
%
|
|
$
|
249,525
|
|
|
68.6
|
%
|
Program and other fees
|
101,402
|
|
|
23.6
|
%
|
|
95,865
|
|
|
17.9
|
%
|
||
Marketing
|
14,367
|
|
|
3.3
|
%
|
|
14,281
|
|
|
5.0
|
%
|
||
Product sales
|
24,813
|
|
|
5.9
|
%
|
|
26,741
|
|
|
8.5
|
%
|
||
Total operating revenues
|
429,208
|
|
|
100.0
|
%
|
|
386,412
|
|
|
100.0
|
%
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||||
Partner distribution expense
|
218,449
|
|
|
50.9
|
%
|
|
175,123
|
|
|
45.2
|
%
|
||
Processing and services
|
92,949
|
|
|
21.6
|
%
|
|
101,021
|
|
|
26.1
|
%
|
||
Sales and marketing
|
64,181
|
|
|
15.0
|
%
|
|
62,658
|
|
|
16.2
|
%
|
||
Costs of products sold
|
24,256
|
|
|
5.7
|
%
|
|
27,849
|
|
|
7.2
|
%
|
||
General and administrative
|
29,322
|
|
|
6.8
|
%
|
|
29,025
|
|
|
7.5
|
%
|
||
Transition and acquisition
|
4,927
|
|
|
1.1
|
%
|
|
451
|
|
|
0.1
|
%
|
||
Amortization of acquisition intangibles
|
14,107
|
|
|
3.3
|
%
|
|
12,562
|
|
|
3.3
|
%
|
||
Change in fair value of contingent consideration
|
100
|
|
|
—
|
%
|
|
1,040
|
|
|
0.3
|
%
|
||
Total operating expenses
|
448,291
|
|
|
104.4
|
%
|
|
409,729
|
|
|
106.0
|
%
|
||
OPERATING INCOME (LOSS)
|
(19,083
|
)
|
|
(4.4
|
)%
|
|
(23,317
|
)
|
|
(6.0
|
)%
|
||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
||||||
Interest income and other income (expense), net
|
(224
|
)
|
|
(0.1
|
)%
|
|
836
|
|
|
0.2
|
%
|
||
Interest expense
|
(7,786
|
)
|
|
(1.8
|
)%
|
|
(6,943
|
)
|
|
(1.8
|
)%
|
||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
|
(27,093
|
)
|
|
(6.3
|
)%
|
|
(29,424
|
)
|
|
(7.6
|
)%
|
||
INCOME TAX EXPENSE (BENEFIT)
|
(11,505
|
)
|
|
(2.7
|
)%
|
|
(12,082
|
)
|
|
(3.1
|
)%
|
||
NET INCOME (LOSS) BEFORE ALLOCATION TO NON-CONTROLLING INTERESTS
|
(15,588
|
)
|
|
(3.6
|
)%
|
|
(17,342
|
)
|
|
(4.5
|
)%
|
||
Loss (income) attributable to non-controlling interests, net of tax
|
(179
|
)
|
|
(0.1
|
)%
|
|
(123
|
)
|
|
—
|
%
|
||
NET INCOME (LOSS) ATTRIBUTABLE TO BLACKHAWK NETWORK HOLDINGS, INC.
|
$
|
(15,767
|
)
|
|
(3.7
|
)%
|
|
$
|
(17,465
|
)
|
|
(4.5
|
)%
|
•
|
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
|
|
|
|
|
|||||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OPERATING REVENUES:
|
|
|
|
|
|
|
|
|||||||
Commissions and fees
|
$
|
288,626
|
|
|
$
|
249,525
|
|
|
$
|
39,101
|
|
|
15.7
|
%
|
Program and other fees
|
101,402
|
|
|
95,865
|
|
|
5,537
|
|
|
5.8
|
%
|
|||
Marketing
|
14,367
|
|
|
14,281
|
|
|
86
|
|
|
0.6
|
%
|
|||
Product sales
|
24,813
|
|
|
26,741
|
|
|
(1,928
|
)
|
|
(7.2
|
)%
|
|||
Total operating revenues
|
$
|
429,208
|
|
|
$
|
386,412
|
|
|
$
|
42,796
|
|
|
11.1
|
%
|
Partner distribution expense
|
218,449
|
|
|
175,123
|
|
|
43,326
|
|
|
24.7
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
210,759
|
|
|
$
|
211,289
|
|
|
$
|
(530
|
)
|
|
(0.3
|
)%
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
231,935
|
|
|
$
|
197,973
|
|
|
$
|
33,962
|
|
|
17.2
|
%
|
Partner distribution expense
|
130,190
|
|
|
97,978
|
|
|
32,212
|
|
|
32.9
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
101,745
|
|
|
$
|
99,995
|
|
|
$
|
1,750
|
|
|
1.8
|
%
|
Transaction dollar volume (1)
|
$
|
2,202,142
|
|
|
$
|
1,824,213
|
|
|
$
|
377,929
|
|
|
20.7
|
%
|
Prepaid and processing revenues
|
$
|
209,111
|
|
|
$
|
168,703
|
|
|
$
|
40,408
|
|
|
24.0
|
%
|
Prepaid and processing revenues as a percentage of transaction dollar volume (2)
|
9.5
|
%
|
|
9.2
|
%
|
|
0.3
|
%
|
|
3.3
|
%
|
|||
Partner distribution expense as a percentage of prepaid and processing revenues
|
62.3
|
%
|
|
58.1
|
%
|
|
4.2
|
%
|
|
7.2
|
%
|
(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
—Increased due to higher sales of prepaid products as a result of the expansion of our retail network, increased sales through our online distribution channels as well as our acquisition of CashStar, Inc. and its subsidiaries (collectively “CashStar”) in the third quarter of 2017.
|
•
|
Prepaid and processing revenues as a percentage of transaction dollar volume
—In the first quarter of 2018, we entered into a contractual amendment related to an open loop product which resulted in a one-time benefit of $7.1 million which we recognized in
Program and other fees.
Excluding this benefit, our Prepaid and processing revenue rate remained the same as the first quarter of 2017 at 9.2%.
|
•
|
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 first quarter of 2018 due to an increase in the proportion of closed loop sales through retail distribution partners with higher commission share rates as well as recent increases in competitive pressures in some U.S. retail markets which we expect to continue to result in higher partner distribution expense as a percentage of prepaid and processing revenues. These impacts were 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.
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
57,454
|
|
|
$
|
53,260
|
|
|
$
|
4,194
|
|
|
7.9
|
%
|
Partner distribution expense
|
5,027
|
|
|
3,856
|
|
|
1,171
|
|
|
30.4
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
52,427
|
|
|
$
|
49,404
|
|
|
$
|
3,023
|
|
|
6.1
|
%
|
Prepaid and processing revenues
|
$
|
52,999
|
|
|
$
|
49,389
|
|
|
$
|
3,610
|
|
|
7.3
|
%
|
Partner distribution expense as a percentage of prepaid and processing revenues
|
9.5
|
%
|
|
7.8
|
%
|
|
1.7
|
%
|
|
21.8
|
%
|
•
|
Prepaid and processing revenues
—Prepaid and processing revenues increased
$3.6 million
in the first quarter of 2018, driven by the growth in our employee engagement business, loyalty programs and e-commerce channel. These increases were partially offset by decreases in other incentives programs.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Increased for the first quarter due to higher proportion of sales through business clients for which we recognize net pricing discounts as an expense, partially offset by growth in businesses where we do not incur partner distribution expense.
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
Total operating revenues
|
$
|
139,819
|
|
|
$
|
135,179
|
|
|
$
|
4,640
|
|
|
3.4
|
%
|
Partner distribution expense
|
83,232
|
|
|
73,289
|
|
|
9,943
|
|
|
13.6
|
%
|
|||
Operating revenues, net of Partner distribution expense
|
$
|
56,587
|
|
|
$
|
61,890
|
|
|
$
|
(5,303
|
)
|
|
(8.6
|
)%
|
Prepaid and processing revenues
|
$
|
127,918
|
|
|
$
|
127,298
|
|
|
$
|
620
|
|
|
0.5
|
%
|
Partner distribution expense as a percentage of prepaid and processing revenues
|
65.1
|
%
|
|
57.6
|
%
|
|
7.5
|
%
|
|
13.0
|
%
|
•
|
Prepaid and processing revenues
— Remained relatively constant compared to the first quarter of 2017 primarily due to the sale of The Grass Roots Group Holdings Limited and its subsidiaries (collectively “Grass Roots”) Meeting and Events business (“M&E”) in the fourth quarter of 2017. Excluding M&E,
prepaid and processing revenues
increased $15.6 million for the first quarter of 2018 due to increased sales volume in all regions, primarily Germany and Canada, partially due to the expansion of our distribution network.
|
•
|
Partner distribution expense as a percentage of prepaid and processing revenues
—Increased mainly due to the sale of our M&E business resulting in a reduction of $15.1 million in Prepaid and processing revenues with no corresponding decrease in Partner distribution expense. Excluding the effects of the M&E sale, our
partner distribution expense as a percentage of prepaid and processing revenue
decreased from 65.3% to 65.1% for the first quarter of 2018 primarily 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
|
|
|
|
|
|||||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|||||||
Partner distribution expense
|
$
|
218,449
|
|
|
$
|
175,123
|
|
|
$
|
43,326
|
|
|
24.7
|
%
|
Processing and services
|
92,949
|
|
|
101,021
|
|
|
(8,072
|
)
|
|
(8.0
|
)%
|
|||
Sales and marketing
|
64,181
|
|
|
62,658
|
|
|
1,523
|
|
|
2.4
|
%
|
|||
Costs of products sold
|
24,256
|
|
|
27,849
|
|
|
(3,593
|
)
|
|
(12.9
|
)%
|
|||
General and administrative
|
29,322
|
|
|
29,025
|
|
|
297
|
|
|
1.0
|
%
|
|||
Transition and acquisition
|
4,927
|
|
|
451
|
|
|
4,476
|
|
|
992.5
|
%
|
|||
Amortization of acquisition intangibles
|
14,107
|
|
|
12,562
|
|
|
1,545
|
|
|
12.3
|
%
|
|||
Change in fair value of contingent consideration
|
100
|
|
|
1,040
|
|
|
(940
|
)
|
|
(90.4
|
)%
|
|||
Total operating expenses
|
$
|
448,291
|
|
|
$
|
409,729
|
|
|
$
|
38,562
|
|
|
9.4
|
%
|
|
12 weeks ended
|
|
|
|
|
|||||||||
|
March 24, 2018
|
|
March 25, 2017
|
|
Change
|
|||||||||
|
(in thousands, except percentages)
|
|||||||||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|
|||||||
Interest income and other income (expense), net
|
$
|
(224
|
)
|
|
$
|
836
|
|
|
$
|
(1,060
|
)
|
|
(126.8
|
)%
|
Interest expense
|
(7,786
|
)
|
|
(6,943
|
)
|
|
(843
|
)
|
|
12.1
|
%
|
|||
Total other income (expense)
|
$
|
(8,010
|
)
|
|
$
|
(6,107
|
)
|
|
$
|
(1,903
|
)
|
|
31.2
|
%
|
INCOME TAX EXPENSE (BENEFIT)
|
$
|
(11,505
|
)
|
|
$
|
(12,082
|
)
|
|
$
|
577
|
|
|
(4.8
|
)%
|
EFFECTIVE TAX RATE
|
42.5
|
%
|
|
41.1
|
%
|
|
1.4
|
%
|
|
|
|
12 weeks ended
|
||||||
|
March 24, 2018
|
|
March 25, 2017
|
||||
|
(in thousands)
|
||||||
Net cash (used in) provided by operating activities
|
$
|
(853,084
|
)
|
|
$
|
(720,198
|
)
|
Net cash (used in) provided by investing activities
|
(16,819
|
)
|
|
(32,778
|
)
|
||
Net cash (used in) provided by financing activities
|
50,670
|
|
|
(1,036
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
8,573
|
|
|
6,462
|
|
||
Decrease in cash, cash equivalents and restricted cash
|
$
|
(810,660
|
)
|
|
$
|
(747,550
|
)
|
•
|
an increase of
$73.3 million
cash used by non-settlement related operating assets and liabilities for the
12 weeks ended
March 24, 2018
compared to the
12 weeks ended
March 25, 2017
, mainly due to an increase in our operating assets; partially offset by
|
•
|
pre-tax income, adjusted for noncash reconciling items (excluding deferred income taxes), increased $5.2 million
|
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
|
||||||
Dec 31 2017 to Jan 27 2018
|
|
43
|
|
|
$
|
35.75
|
|
|
—
|
|
|
$
|
—
|
|
Jan 28 2018 to Feb 24 2018
|
|
101
|
|
|
$
|
45.28
|
|
|
—
|
|
|
$
|
—
|
|
Feb 25 2018 to Mar 24 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
144
|
|
|
$
|
42.43
|
|
|
—
|
|
|
$
|
—
|
|
(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/ Charles O. Garner
|
Charles O. Garner
|
Chief Financial 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
|
|
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 |
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