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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wageworks Inc | NYSE:WAGE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 51.34 | 0 | 01:00:00 |
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(Mark One)
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☒
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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
|
Delaware
|
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94-3351864
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification Number)
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1100 Park Place, 4th Floor
San Mateo, California 94403
(Address of principal executive offices, including zip code)
|
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Large accelerated filer
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☒
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Accelerated filer
|
☐
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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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Emerging growth company
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☐
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Page No.
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September 30, 2017
|
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December 31, 2016
|
||||
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(Unaudited)
|
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Derived from
Audited Financial
Statements
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
798,266
|
|
|
$
|
678,300
|
|
Restricted cash
|
332
|
|
|
332
|
|
||
Short-term investments
|
94,087
|
|
|
—
|
|
||
Accounts receivable, net
|
183,237
|
|
|
92,888
|
|
||
Prepaid expenses and other current assets
|
21,410
|
|
|
19,422
|
|
||
Total current assets
|
1,097,332
|
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|
790,942
|
|
||
Property and equipment, net
|
69,963
|
|
|
56,902
|
|
||
Goodwill
|
297,409
|
|
|
297,409
|
|
||
Acquired intangible assets, net
|
161,281
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|
|
176,489
|
|
||
Deferred tax assets
|
16,562
|
|
|
16,309
|
|
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Other assets
|
7,009
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|
|
5,300
|
|
||
Total assets
|
$
|
1,649,556
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$
|
1,343,351
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Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
90,961
|
|
|
$
|
72,966
|
|
Customer obligations
|
702,432
|
|
|
603,842
|
|
||
Other current liabilities
|
223
|
|
|
467
|
|
||
Total current liabilities
|
793,616
|
|
|
677,275
|
|
||
Long-term debt
|
244,791
|
|
|
248,848
|
|
||
Other non-current liabilities
|
10,468
|
|
|
9,131
|
|
||
Total liabilities
|
1,048,875
|
|
|
935,254
|
|
||
Commitments and Contingencies (Note 13)
|
|
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|
||||
Stockholders' Equity:
|
|
|
|
||||
Common stock, par value $0.001 per share (authorized 1,000,000 shares; 40,095 shares issued and 39,616 shares outstanding at September 30, 2017 and 37,247 shares issued and 36,902 shares outstanding at December 31, 2016)
|
41
|
|
|
37
|
|
||
Additional paid-in capital
|
563,893
|
|
|
403,459
|
|
||
Treasury stock at cost (480 shares at September 30, 2017 and 345 shares at December 31, 2016)
|
(22,309
|
)
|
|
(14,374
|
)
|
||
Accumulated other comprehensive loss
|
(35
|
)
|
|
—
|
|
||
Retained earnings
|
59,091
|
|
|
18,975
|
|
||
Total stockholders’ equity
|
600,681
|
|
|
408,097
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,649,556
|
|
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$
|
1,343,351
|
|
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Three Months Ended September 30,
|
|
Nine months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Healthcare
|
$
|
66,203
|
|
|
$
|
48,478
|
|
|
$
|
210,187
|
|
|
$
|
146,918
|
|
Commuter
|
17,966
|
|
|
17,580
|
|
|
54,376
|
|
|
52,339
|
|
||||
COBRA
|
27,540
|
|
|
18,670
|
|
|
83,581
|
|
|
51,955
|
|
||||
Other
|
4,037
|
|
|
4,196
|
|
|
12,483
|
|
|
12,439
|
|
||||
Total revenues
|
115,746
|
|
|
88,924
|
|
|
360,627
|
|
|
263,651
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenues (excluding amortization of internal use software)
|
38,805
|
|
|
30,566
|
|
|
129,410
|
|
|
90,237
|
|
||||
Technology and development
|
13,949
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|
11,668
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43,852
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|
32,656
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|
||||
Sales and marketing
|
16,401
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|
|
14,012
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47,244
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|
|
42,317
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|
||||
General and administrative
|
20,220
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|
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16,130
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|
|
63,410
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|
|
47,875
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|
||||
Amortization and change in contingent consideration
|
9,698
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|
|
6,944
|
|
|
28,920
|
|
|
26,084
|
|
||||
Employee termination and other charges
|
(148
|
)
|
|
162
|
|
|
1,500
|
|
|
475
|
|
||||
Total operating expenses
|
98,925
|
|
|
79,482
|
|
|
314,336
|
|
|
239,644
|
|
||||
Income from operations
|
16,821
|
|
|
9,442
|
|
|
46,291
|
|
|
24,007
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
340
|
|
|
117
|
|
|
502
|
|
|
300
|
|
||||
Interest expense
|
(1,987
|
)
|
|
(465
|
)
|
|
(5,047
|
)
|
|
(1,279
|
)
|
||||
Other income (expense)
|
(25
|
)
|
|
22
|
|
|
(246
|
)
|
|
24
|
|
||||
Income before income taxes
|
15,149
|
|
|
9,116
|
|
|
41,500
|
|
|
23,052
|
|
||||
Income tax provision
|
(5,464
|
)
|
|
(3,222
|
)
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|
(1,613
|
)
|
|
(8,509
|
)
|
||||
Net income
|
$
|
9,685
|
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$
|
5,894
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$
|
39,887
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|
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$
|
14,543
|
|
Net income per share:
|
|
|
|
|
|
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|
||||||||
Basic
|
$
|
0.24
|
|
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$
|
0.16
|
|
|
$
|
1.05
|
|
|
$
|
0.40
|
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Diluted
|
$
|
0.24
|
|
|
$
|
0.16
|
|
|
$
|
1.02
|
|
|
$
|
0.39
|
|
Shares used in computing net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
39,641
|
|
|
36,605
|
|
|
38,028
|
|
|
36,312
|
|
||||
Diluted
|
40,264
|
|
|
37,454
|
|
|
39,106
|
|
|
37,078
|
|
|
Three Months Ended September 30,
|
|
Nine months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
9,685
|
|
|
$
|
5,894
|
|
|
$
|
39,887
|
|
|
$
|
14,543
|
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized loss on investments
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
||||
Other comprehensive loss, net of tax
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
||||
Total comprehensive income
|
$
|
9,650
|
|
|
$
|
5,894
|
|
|
$
|
39,852
|
|
|
$
|
14,543
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
39,887
|
|
|
$
|
14,543
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
7,941
|
|
|
6,202
|
|
||
Amortization and change in contingent consideration
|
28,920
|
|
|
25,986
|
|
||
Amortization of debt issuance costs
|
294
|
|
|
111
|
|
||
Stock-based compensation expense
|
25,096
|
|
|
22,373
|
|
||
Loss on disposal of fixed assets
|
98
|
|
|
185
|
|
||
Provision for doubtful accounts
|
4,299
|
|
|
1,238
|
|
||
Deferred taxes
|
—
|
|
|
(424
|
)
|
||
Other
|
(99
|
)
|
|
—
|
|
||
Excess tax benefits related to stock-based compensation arrangements
|
—
|
|
|
(8,824
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(94,648
|
)
|
|
(14,102
|
)
|
||
Prepaid expenses and other current assets
|
(2,488
|
)
|
|
919
|
|
||
Other assets
|
(1,709
|
)
|
|
(50
|
)
|
||
Accounts payable and accrued expenses
|
14,615
|
|
|
6,076
|
|
||
Customer obligations
|
98,590
|
|
|
148,495
|
|
||
Other liabilities
|
1,093
|
|
|
(688
|
)
|
||
Net cash provided by operating activities
|
121,889
|
|
|
202,040
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(28,489
|
)
|
|
(20,529
|
)
|
||
Purchases of short-term investments
|
(99,445
|
)
|
|
—
|
|
||
Proceeds from sales of short-term investments
|
5,398
|
|
|
—
|
|
||
Purchases of intangible assets
|
(2,107
|
)
|
|
(20,777
|
)
|
||
Net cash used in investing activities
|
(124,643
|
)
|
|
(41,306
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from public stock offering, net of underwriting discounts, commissions and other costs
|
130,832
|
|
|
—
|
|
||
Proceeds from exercise of common stock options
|
10,834
|
|
|
10,705
|
|
||
Proceeds from issuance of common stock under Employee Stock Purchase Plan
|
2,172
|
|
|
1,672
|
|
||
Payments of debt issuance costs
|
(1,851
|
)
|
|
(200
|
)
|
||
Payments of debt principal
|
(2,500
|
)
|
|
—
|
|
||
Payments of contingent consideration
|
—
|
|
|
(653
|
)
|
||
Payments for treasury stock acquired
|
(7,935
|
)
|
|
(9,371
|
)
|
||
Taxes paid related to net share settlement of stock-based compensation arrangements
|
(8,832
|
)
|
|
(5,995
|
)
|
||
Excess tax benefits related to stock-based compensation arrangements
|
—
|
|
|
8,824
|
|
||
Net cash provided by financing activities
|
122,720
|
|
|
4,982
|
|
||
Net increase in cash and cash equivalents
|
119,966
|
|
|
165,716
|
|
||
Cash and cash equivalents at beginning of period
|
678,300
|
|
|
500,918
|
|
||
Cash and cash equivalents at end of period
|
$
|
798,266
|
|
|
$
|
666,634
|
|
Supplemental cash flow disclosure:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
4,659
|
|
|
$
|
1,139
|
|
Income taxes
|
$
|
2,940
|
|
|
$
|
5,216
|
|
Noncash financing and investing activities:
|
|
|
|
||||
Property and equipment, accrued but not paid
|
$
|
3,732
|
|
|
$
|
2,882
|
|
Contingent payment, accrued but not paid
|
$
|
2,060
|
|
|
$
|
—
|
|
•
|
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
|
•
|
Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
|
•
|
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
|
|
Three months ended September 30,
|
|
Nine months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator for basic net income per share:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
9,685
|
|
|
$
|
5,894
|
|
|
$
|
39,887
|
|
|
$
|
14,543
|
|
Denominator for basic net income per share:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
39,641
|
|
|
36,605
|
|
|
38,028
|
|
|
36,312
|
|
||||
Basic net income per share
|
$
|
0.24
|
|
|
$
|
0.16
|
|
|
$
|
1.05
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator for diluted net income per share:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
9,685
|
|
|
$
|
5,894
|
|
|
$
|
39,887
|
|
|
$
|
14,543
|
|
Denominator for diluted net income per share:
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
39,641
|
|
|
36,605
|
|
|
38,028
|
|
|
36,312
|
|
||||
Dilutive stock options and restricted stock units
|
622
|
|
|
849
|
|
|
1,057
|
|
|
733
|
|
||||
Dilutive vested performance restricted stock units
|
—
|
|
|
—
|
|
|
20
|
|
|
33
|
|
||||
Dilutive employee stock purchase plan shares
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Diluted weighted-average common shares outstanding
|
40,264
|
|
|
37,454
|
|
|
39,106
|
|
|
37,078
|
|
||||
Diluted net income per share
|
$
|
0.24
|
|
|
$
|
0.16
|
|
|
$
|
1.02
|
|
|
$
|
0.39
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
|
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
|
||||||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Client contracts and broker relationships
|
$
|
236,730
|
|
|
$
|
78,539
|
|
|
$
|
158,191
|
|
|
$
|
232,560
|
|
|
$
|
60,569
|
|
|
$
|
171,991
|
|
Trade names
|
3,880
|
|
|
3,469
|
|
|
411
|
|
|
3,880
|
|
|
3,078
|
|
|
802
|
|
||||||
Technology
|
14,646
|
|
|
12,752
|
|
|
1,894
|
|
|
14,646
|
|
|
11,867
|
|
|
2,779
|
|
||||||
Noncompete agreements
|
2,232
|
|
|
1,995
|
|
|
237
|
|
|
2,232
|
|
|
1,941
|
|
|
291
|
|
||||||
Favorable lease
|
1,134
|
|
|
586
|
|
|
548
|
|
|
1,136
|
|
|
510
|
|
|
626
|
|
||||||
Total
|
$
|
258,622
|
|
|
$
|
97,341
|
|
|
$
|
161,281
|
|
|
$
|
254,454
|
|
|
$
|
77,965
|
|
|
$
|
176,489
|
|
|
As of
September 30, 2017 |
||
Remainder of 2017
|
$
|
6,354
|
|
2018
|
25,382
|
|
|
2019
|
24,459
|
|
|
2020
|
22,475
|
|
|
2021
|
19,671
|
|
|
Thereafter
|
62,940
|
|
|
Total
|
$
|
161,281
|
|
|
September 30, 2017
|
||||||||||||||||||||||
|
Carrying Amount
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
11,874
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,874
|
|
|
$
|
11,874
|
|
|
$
|
—
|
|
Commercial papers
|
19,229
|
|
|
—
|
|
|
—
|
|
|
19,229
|
|
|
—
|
|
|
19,229
|
|
||||||
Total cash equivalents
|
31,103
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,103
|
|
|
$
|
11,874
|
|
|
$
|
19,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate debt securities
|
$
|
42,148
|
|
|
$
|
—
|
|
|
$
|
(34
|
)
|
|
$
|
42,114
|
|
|
$
|
—
|
|
|
$
|
42,114
|
|
Commercial papers
|
25,637
|
|
|
1
|
|
|
—
|
|
|
25,638
|
|
|
—
|
|
|
25,638
|
|
||||||
Asset-backed securities
|
9,369
|
|
|
—
|
|
|
(10
|
)
|
|
9,359
|
|
|
—
|
|
|
9,359
|
|
||||||
U.S. treasury securities
|
4,507
|
|
|
—
|
|
|
(4
|
)
|
|
4,503
|
|
|
4,503
|
|
|
—
|
|
||||||
U.S. government agency securities
|
4,984
|
|
|
—
|
|
|
(2
|
)
|
|
4,982
|
|
|
—
|
|
|
4,982
|
|
||||||
Non-U.S. government and agency securities
|
7,500
|
|
|
—
|
|
|
(9
|
)
|
|
7,491
|
|
|
—
|
|
|
7,491
|
|
||||||
Total short-term investments
|
$
|
94,145
|
|
|
$
|
1
|
|
|
$
|
(59
|
)
|
|
$
|
94,087
|
|
|
$
|
4,503
|
|
|
$
|
89,584
|
|
Total cash equivalents and short-term investments
|
$
|
125,248
|
|
|
$
|
1
|
|
|
$
|
(59
|
)
|
|
$
|
125,190
|
|
|
$
|
16,377
|
|
|
$
|
108,813
|
|
|
|
September 30, 2017
|
||||||||||
|
|
Amortized Costs
|
|
Fair Value
|
||||||||
Due less than one year
|
|
$
|
76,568
|
|
|
$
|
76,561
|
|
||||
Due in one to five years
|
|
48,680
|
|
|
48,629
|
|
||||||
Total
|
|
$
|
125,248
|
|
|
$
|
125,190
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Trade receivables
|
$
|
42,915
|
|
|
$
|
54,010
|
|
Unpaid amounts for benefit services
|
146,834
|
|
|
41,287
|
|
||
Accounts receivable, gross
|
189,749
|
|
|
95,297
|
|
||
Less allowance for doubtful accounts
|
(6,512
|
)
|
|
(2,409
|
)
|
||
Accounts receivable, net
|
$
|
183,237
|
|
|
$
|
92,888
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Computers and equipment
|
$
|
21,264
|
|
|
$
|
16,419
|
|
Software and software development costs
|
124,960
|
|
|
108,190
|
|
||
Furniture and fixtures
|
7,675
|
|
|
6,784
|
|
||
Leasehold improvements
|
25,088
|
|
|
19,478
|
|
||
|
$
|
178,987
|
|
|
$
|
150,871
|
|
Less accumulated depreciation and amortization
|
(109,024
|
)
|
|
(93,969
|
)
|
||
Property and equipment, net
|
$
|
69,963
|
|
|
$
|
56,902
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Accounts payable
|
$
|
2,916
|
|
|
$
|
3,026
|
|
Payable to benefit providers and transit agencies
|
24,363
|
|
|
24,528
|
|
||
Accrued payables
|
24,359
|
|
|
18,627
|
|
||
Accrued compensation and related benefits
|
27,393
|
|
|
20,314
|
|
||
Other accrued expenses
|
4,823
|
|
|
3,379
|
|
||
Deferred revenue
|
7,107
|
|
|
3,092
|
|
||
Accounts payable and accrued expenses
|
$
|
90,961
|
|
|
$
|
72,966
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Revolving credit facility used
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Add: Letters of credit issued in 2017
|
2,330
|
|
|
—
|
|
||
Less: Principal pay down in 2017
|
(2,500
|
)
|
|
—
|
|
||
Less: Outstanding letters of credit
|
(2,830
|
)
|
|
(500
|
)
|
||
Outstanding revolving credit facility
|
247,000
|
|
|
249,500
|
|
||
Unamortized loan origination fees
|
(2,209
|
)
|
|
(652
|
)
|
||
Long-term debt
|
$
|
244,791
|
|
|
$
|
248,848
|
|
|
|
|
|
|
Amount
|
||
Beginning balance as of December 31, 2016
|
$
|
—
|
|
Employee termination and other charges
|
1,514
|
|
|
Cash paid
|
(1,469
|
)
|
|
Others
|
(34
|
)
|
|
Ending balance as of September 30, 2017
|
$
|
11
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of revenues
|
$
|
1,824
|
|
|
$
|
1,581
|
|
|
$
|
5,554
|
|
|
$
|
4,549
|
|
Technology and development
|
527
|
|
|
671
|
|
|
1,794
|
|
|
1,815
|
|
||||
Sales and marketing
|
719
|
|
|
789
|
|
|
2,166
|
|
|
2,287
|
|
||||
General and administrative
|
5,002
|
|
|
4,490
|
|
|
15,582
|
|
|
13,722
|
|
||||
Total
|
$
|
8,072
|
|
|
$
|
7,531
|
|
|
$
|
25,096
|
|
|
$
|
22,373
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Stock options granted (in thousands)
|
63
|
|
|
27
|
|
|
608
|
|
|
804
|
|
||||
Weighted-average fair value at date of grant
|
$
|
23.27
|
|
|
$
|
22.86
|
|
|
$
|
26.36
|
|
|
$
|
18.30
|
|
|
Shares
|
|
Weighted-average
exercise price
|
|
Remaining
contractual term
(in years)
|
|
Aggregate
intrinsic value
(in thousands)
|
|||||
Outstanding at December 31, 2016
|
2,844
|
|
|
$
|
33.74
|
|
|
7.00
|
|
$
|
110,256
|
|
Granted
|
608
|
|
|
72.13
|
|
|
|
|
|
|||
Exercised
|
(670
|
)
|
|
16.16
|
|
|
|
|
|
|||
Forfeited and cancelled
|
(178
|
)
|
|
53.46
|
|
|
|
|
|
|||
Outstanding as of September 30, 2017
|
2,604
|
|
|
$
|
45.87
|
|
|
7.38
|
|
$
|
45,050
|
|
Vested and expected to vest at September 30, 2017
|
2,494
|
|
|
$
|
45.33
|
|
|
7.32
|
|
$
|
44,230
|
|
Exercisable at September 30, 2017
|
1,322
|
|
|
$
|
33.84
|
|
|
6.12
|
|
$
|
35,516
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Expected volatility
|
37.83
|
%
|
|
41.87
|
%
|
|
39.88
|
%
|
|
42.69
|
%
|
Risk-free interest rate
|
1.79
|
%
|
|
1.07
|
%
|
|
1.86
|
%
|
|
1.17
|
%
|
Expected term (in years)
|
4.74
|
|
|
4.87
|
|
|
4.74
|
|
|
4.87
|
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(Shares in thousands)
|
|
Weighted-average grant date fair value
|
|||||||||||||||||
|
Service-
based RSUs
|
|
Performance-
based RSUs
|
|
Market-based
RSUs
|
|
Service-
based RSUs
|
|
Performance-
based RSUs
|
|
Market-based
RSUs
|
|||||||||
Unvested at December 31, 2016
|
257
|
|
|
491
|
|
|
166
|
|
|
$
|
50.49
|
|
|
$
|
51.03
|
|
|
$
|
49.38
|
|
Granted
(1)
|
77
|
|
|
379
|
|
|
—
|
|
|
71.45
|
|
|
71.02
|
|
|
—
|
|
|||
Vested
(2)
|
(102
|
)
|
|
(124
|
)
|
|
(83
|
)
|
|
44.92
|
|
|
57.10
|
|
|
49.38
|
|
|||
Forfeited and cancelled
|
(27
|
)
|
|
(21
|
)
|
|
(83
|
)
|
|
61.06
|
|
|
58.57
|
|
|
49.38
|
|
|||
Unvested at September 30, 2017
|
205
|
|
|
725
|
|
|
—
|
|
|
$
|
59.75
|
|
|
$
|
60.21
|
|
|
$
|
—
|
|
(1)
|
Performance-based RSUs include additional shares granted as specified financial metrics for the performance-based restricted stock units, granted to certain executives in 2014, during the performance period of January 1, 2014 through December 31, 2016 were met, resulting in actual shares vesting at
141%
of the target number of shares originally granted. The weighted average grant date fair value of these additional shares was
$57.10
. In addition, there are additional shares granted as specified financial metrics for the performance-based RSUs, which were granted to certain executives in February 2017.
|
(2)
|
Performance-based RSUs include approximately
123,750
shares vested from performance-based restricted stock units granted to certain executives in 2014 representing
141%
of the target number of shares originally granted.
|
|
As of
September 30, 2017 |
||
Remainder of 2017
|
$
|
2,351
|
|
2018
|
9,395
|
|
|
2019
|
9,382
|
|
|
2020
|
9,130
|
|
|
2021
|
8,647
|
|
|
Thereafter
|
6,566
|
|
|
Total future minimum lease payments
|
$
|
45,471
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
|
2017
|
|
2016
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
||||||||||||||
(Dollar in thousands)
|
Amount
|
|
Amount
|
|
$ Change
|
|
% Change
|
|
Amount
|
|
Amount
|
|
$ Change
|
|
% Change
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Healthcare
|
$
|
66,203
|
|
|
$
|
48,478
|
|
|
$
|
17,725
|
|
|
37
|
%
|
|
$
|
210,187
|
|
|
$
|
146,918
|
|
|
$
|
63,269
|
|
|
43
|
%
|
Commuter
|
17,966
|
|
|
17,580
|
|
|
386
|
|
|
2
|
%
|
|
54,376
|
|
|
52,339
|
|
|
2,037
|
|
|
4
|
%
|
||||||
COBRA
|
27,540
|
|
|
18,670
|
|
|
8,870
|
|
|
48
|
%
|
|
83,581
|
|
|
51,955
|
|
|
31,626
|
|
|
61
|
%
|
||||||
Other
|
4,037
|
|
|
4,196
|
|
|
(159
|
)
|
|
(4
|
)%
|
|
12,483
|
|
|
12,439
|
|
|
44
|
|
|
—
|
%
|
||||||
Total revenues
|
$
|
115,746
|
|
|
$
|
88,924
|
|
|
$
|
26,822
|
|
|
30
|
%
|
|
$
|
360,627
|
|
|
$
|
263,651
|
|
|
$
|
96,976
|
|
|
37
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
(Dollar in thousands)
|
Amount
|
|
% of Revenue
|
|
Amount
|
|
% of Revenue
|
|
Amount
|
|
% of Revenue
|
|
Amount
|
|
% of Revenue
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Healthcare
|
$
|
66,203
|
|
|
57
|
%
|
|
$
|
48,478
|
|
|
55
|
%
|
|
$
|
210,187
|
|
|
58
|
%
|
|
$
|
146,918
|
|
|
56
|
%
|
Commuter
|
17,966
|
|
|
16
|
%
|
|
17,580
|
|
|
20
|
%
|
|
54,376
|
|
|
15
|
%
|
|
52,339
|
|
|
20
|
%
|
||||
COBRA
|
27,540
|
|
|
24
|
%
|
|
18,670
|
|
|
21
|
%
|
|
83,581
|
|
|
23
|
%
|
|
51,955
|
|
|
20
|
%
|
||||
Other
|
4,037
|
|
|
3
|
%
|
|
4,196
|
|
|
4
|
%
|
|
12,483
|
|
|
3
|
%
|
|
12,439
|
|
|
4
|
%
|
||||
Total revenues
|
$
|
115,746
|
|
|
100
|
%
|
|
$
|
88,924
|
|
|
100
|
%
|
|
$
|
360,627
|
|
|
100
|
%
|
|
$
|
263,651
|
|
|
100
|
%
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cost of revenues (excluding amortization of internal use software)
|
$
|
38,805
|
|
|
$
|
30,566
|
|
|
$
|
8,239
|
|
|
27
|
%
|
|
$
|
129,410
|
|
|
$
|
90,237
|
|
|
$
|
39,173
|
|
|
43
|
%
|
Percent of revenue
|
34
|
%
|
|
34
|
%
|
|
|
|
|
|
36
|
%
|
|
34
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Technology and development
|
$
|
13,949
|
|
|
$
|
11,668
|
|
|
$
|
2,281
|
|
|
20
|
%
|
|
$
|
43,852
|
|
|
$
|
32,656
|
|
|
$
|
11,196
|
|
|
34
|
%
|
Percent of revenue
|
12
|
%
|
|
13
|
%
|
|
|
|
|
|
12
|
%
|
|
12
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales and marketing
|
$
|
16,401
|
|
|
$
|
14,012
|
|
|
$
|
2,389
|
|
|
17
|
%
|
|
$
|
47,244
|
|
|
$
|
42,317
|
|
|
$
|
4,927
|
|
|
12
|
%
|
Percent of revenue
|
14
|
%
|
|
16
|
%
|
|
|
|
|
|
13
|
%
|
|
16
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative
|
$
|
20,220
|
|
|
$
|
16,130
|
|
|
$
|
4,090
|
|
|
25
|
%
|
|
$
|
63,410
|
|
|
$
|
47,875
|
|
|
$
|
15,535
|
|
|
32
|
%
|
Percent of revenue
|
17
|
%
|
|
18
|
%
|
|
|
|
|
|
18
|
%
|
|
18
|
%
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortization and change in contingent consideration
|
$
|
9,698
|
|
|
$
|
6,944
|
|
|
$
|
2,754
|
|
|
40
|
%
|
|
$
|
28,920
|
|
|
$
|
26,084
|
|
|
$
|
2,836
|
|
|
11
|
%
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Employee termination and other charges
|
$
|
(148
|
)
|
|
$
|
162
|
|
|
$
|
(310
|
)
|
|
(191
|
)%
|
|
$
|
1,500
|
|
|
$
|
475
|
|
|
$
|
1,025
|
|
|
216
|
%
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest income
|
$
|
340
|
|
|
$
|
117
|
|
|
$
|
223
|
|
|
191
|
%
|
|
$
|
502
|
|
|
$
|
300
|
|
|
$
|
202
|
|
|
67
|
%
|
Interest expense
|
(1,987
|
)
|
|
(465
|
)
|
|
1,522
|
|
|
327
|
%
|
|
(5,047
|
)
|
|
(1,279
|
)
|
|
3,768
|
|
|
295
|
%
|
||||||
Other income (expense)
|
(25
|
)
|
|
22
|
|
|
(47
|
)
|
|
214
|
%
|
|
(246
|
)
|
|
24
|
|
|
(270
|
)
|
|
(1,125
|
)%
|
|
Three Months Ended September 30,
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
||||||||||||||||||
(Dollar in thousands)
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Income before income taxes
|
$
|
15,149
|
|
|
$
|
9,116
|
|
|
|
|
|
|
$
|
41,500
|
|
|
$
|
23,052
|
|
|
|
|
|
||||||
Income tax provision
|
$
|
(5,464
|
)
|
|
$
|
(3,222
|
)
|
|
$
|
2,242
|
|
|
70
|
%
|
|
$
|
(1,613
|
)
|
|
$
|
(8,509
|
)
|
|
$
|
(6,896
|
)
|
|
(81
|
)%
|
Effective tax rate
|
36.1
|
%
|
|
35.3
|
%
|
|
|
|
|
|
3.9
|
%
|
|
36.9
|
%
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
|
|
||||||
Net cash provided by operating activities
|
$
|
121,889
|
|
|
$
|
202,040
|
|
Net cash used in investing activities
|
(124,643
|
)
|
|
(41,306
|
)
|
||
Net cash provided by financing activities
|
122,720
|
|
|
4,982
|
|
||
Net change in cash and cash equivalents
|
$
|
119,966
|
|
|
$
|
165,716
|
|
(in thousands)
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
||||||||||
Long-term debt obligations
(1)
|
$
|
247,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
247,000
|
|
|
$
|
—
|
|
Interest on long-term debt obligations
(2)
|
30,887
|
|
|
6,755
|
|
|
13,511
|
|
|
10,621
|
|
|
—
|
|
|||||
Operating lease obligations
(3)
|
45,471
|
|
|
9,410
|
|
|
18,619
|
|
|
15,228
|
|
|
2,214
|
|
|||||
Total
|
$
|
323,358
|
|
|
$
|
16,165
|
|
|
$
|
32,130
|
|
|
$
|
272,849
|
|
|
$
|
2,214
|
|
(1)
|
As of
September 30, 2017
, maximum borrowings under the revolving credit facility are
$400.0
million with a base rate determined in accordance with the credit agreement or, at our option, LIBOR plus a spread of 1.25% to 2.25% per annum, and a maturity date of April 4, 2022. As of
September 30, 2017
, our outstanding principal of
$247.0 million
is presented net of debt issuance costs on our condensed consolidated balance sheets. The debt issuance costs are not included in the table above.
|
(2)
|
Estimated interest payments assume the interest rate applicable as of
September 30, 2017
of
2.74%
per annum on a
$247.0 million
outstanding principal amount.
|
(3)
|
We lease facilities under non-cancelable operating leases expiring at various dates through 2023.
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plan or Program (in thousands)
|
||||||
July 1, 2017 to July 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
85,626
|
|
August 1, 2017 to August 31, 2017
|
134,900
|
|
|
58.82
|
|
|
134,900
|
|
|
77,691
|
|
||
September 1, 2017 to September 30, 2017
|
—
|
|
|
—
|
|
|
—
|
|
|
77,691
|
|
||
Total
|
134,900
|
|
|
$
|
58.82
|
|
|
134,900
|
|
|
$
|
77,691
|
|
|
|
Incorporated by Reference
|
||||
Exhibit No.
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
31.1
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
X
|
|
32.1
(1)
|
|
|
|
|
X
|
|
10.1
|
8-K
|
001-35232
|
10.1
|
4/21/2017
|
|
|
10.2
|
8-K
|
001-35232
|
10.2
|
4/21/2017
|
|
|
10.10H
|
10-Q
|
001-35232
|
10.10H
|
8/1/2017
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
(1)
|
The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of WageWorks, Inc. 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 Form 10-Q, irrespective of any general incorporation language contained in such filing.
|
|
|
WAGEWORKS, INC.
|
|
|
|
Date: November 8, 2017
|
By:
|
/s/ COLM M CALLAN
|
|
|
Colm M Callan
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
/s/ COLM M CALLAN
|
|
|
Colm M Callan
|
|
|
Chief Financial Officer
|
|
|
(Principal Accounting Officer)
|
|
|
Incorporated by Reference
|
||||
Exhibit No.
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
31.1
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
X
|
|
32.1
(1)
|
|
|
|
|
X
|
|
10.1
|
8-K
|
001-35232
|
10.1
|
4/21/2017
|
|
|
10.2
|
8-K
|
001-35232
|
10.2
|
4/21/2017
|
|
|
10.10H
|
10-Q
|
001-35232
|
10.10H
|
8/1/2017
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
|
|
(1)
|
The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of WageWorks, Inc. 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 Form 10-Q, irrespective of any general incorporation language contained in such filing.
|
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